Aggregation versus value based procurement in public healthcare procurement

Procurement in the UKs National Health Service (NHS) is facing its most significant financial challenge. Government rhetoric sees procurement as either the NHS’s biggest inefficiency or its greatest opportunity. Despite the complexities, diversity and sheer scale of the NHS, the solutions offered are all too often packaged as “collaborate more”, “standardise products” and “leverage spend”. Unfortunately, these overly simplistic solutions often take a myopic view of market drivers and impacts, conflate spend with potential savings, and can ask the wrong questions of NHS professionals and suppliers alike. Most importantly, many contracts have already been commercially optimised yet the funding crisis continues to deepen. In this paper we provide a hermeneutic analysis of recent Government commissioned reports to show how these have set the tone, culture and priorities for NHS procurement. The analysis provides a backdrop to an empirical case study focused on a regional cluster of six NHS Trusts in England. The case study illustrates how the reports, and the wider reform agenda, have led to, and legitimised the dominance of narrow price-based approaches in NHS procurement and as a consequence, creates difficulties in moving towards holistic value-based procurement approaches