Sub-Optimality in NHS Sourcing in the UK: Demand-Side Constraints on Supply-Side Improvement

The UK NHS and its Purchasing and Supply Agency (PASA) are implementing reforms for the procurement of goods and services. One aspect of the new approach creates regional confederations in order to overcome the current inability to enforce 'National Framework Agreements' within individual NHS Trusts. This is a sensible approach to resolving a lack of effective consolidation of demand within the NHS at the Trust level, but recent research into the procurement practices of regionally based NHS Trusts has highlighted a number of internal demand problems that this new approach is unlikely to overcome. These include the failure by the Trusts individually, and by the NHS centrally, to control and manage the NHS design and specification process effectively and, in many cases, an inability to measure or collect information on the clinical and cost effectiveness of medical interventions. It is argued, therefore, that while the new reforms may be an improvement on the past, it is likely that the confederations are destined to fail. This is largely the result of the NHS - centrally, regionally and locally - lacking an understanding of how to align demand and supply effectively so as to provide the levers to manage the procurement of goods and services proactively.