The success of Integrated Care Systems (ICS) in the NHS relies on a shared vision, effective collaboration and coordinated budget management across all member Trusts. We helped the Hertfordshire and West Essex (H&WE) ICS to achieve this with a consolidated, more effective procurement function that is helping to save £143m that can be spent on delivering patient care.
H&WE ICS brings together a wide range of organisations who are committed to working together to improve the health and wellbeing of the 1.6 million people who live in Hertfordshire and West Sussex. Their 2023-2028 Forward Plan outlined their strategic priorities, which included reducing procurement and supply costs, and purchasing medicines at the most effective price point. However, the existing procurement teams were already working at capacity, and a lack of collaboration meant savings opportunities were being missed. It was clear that to achieve their goals, the ICS would need to implement a complex and unprecedented procurement transformation programme that they didn’t have the capacity or capability to deliver alone.
Providing much needed skill and capacity
Our experts were asked to create a mature and best-in-class procurement function that would give the ICS greater visibility and control of their spend and help them make significant savings. We identified a three-phase approach and started by co-developing a new target operating model (TOM) that covered people, processes, policy, systems, governance, and savings delivery. We ensured that this was scalable to meet the future demands of the ICS.
We then reviewed their existing procurement maturity to identify any weaknesses. This work helped us to design the new procurement function and identify potential clinical and non-clinical savings of £143m over five years. To realise these savings, we began phase two of the programme, which involved consolidating existing procurement systems into a single standard model. At the same time, we helped to restructure the procurement teams and improve the contract management and supplier relationship management methodologies, tools, and templates they work with.
Transforming purchasing power with a new tactical ‘buying hub’
H&WE ICS is responsible for providing health and social care services to a large and diverse population across a vast area. To meet the needs of their patients, the ICS has to procure a wide range of goods and services every month, from medical equipment and supplies to IT systems and consultancy. To ensure that they get the best value for money and quality from their suppliers, the ICS with Capita implemented a new operating model that centralised and streamlined their procurement processes. One of the main components of the new model was the tactical buying hub. The tactical buying hub is responsible for executing the day-to-day purchasing activities, such as requesting quotes, placing orders, and tracking deliveries. By having a dedicated team of procurement professionals who can negotiate effectively with suppliers and leverage their collective buying power, the ICS can achieve better outcomes in terms of price, quality, and timeliness.
Once all the crucial parts of the procurement function were in place, phase three of the programme was to first, provide the ICS a clear plan of action of how they could save money across clinical and non-clinical categories in 2022/23, and then for Capita to work alongside the procurement team to deliver on those projects. This phase has enabled the ICS to benefit from over £3m in annual savings as well as identifying a future savings pipeline for 2023/24.
Without our support H&WE would’ve needed to recruit more procurement professionals or outsource the function to another provider. Instead, they now have high-performing procurement function with the right skills, systems and tools, and are on target to achieve the £143m of identified savings over the five years. This money can then be spent on the nurses and vital equipment that are needed to improve patient care.
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