Happy Birthday NHS. May your future procurement strategy be bright

The NHS turned 65 last week. Born in the baby-boomers era, the NHS went through many reorganisations and reforms aimed at making the offer of healthcare services more adequate to the population evolving healthcare needs. The achievement of this...

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The NHS turned 65 last week. Born in the baby-boomers era, the NHS went through many reorganisations and reforms aimed at making the offer of healthcare services more adequate to the population evolving healthcare needs. The achievement of this objective in the last decade has become more difficult and the NHS, as other European health services, seems not to properly respond to the demand of healthcare services, especially (and ironically) driven by the current needs of baby-boomers.

With the next UK general election coming closer, discussions on how the NHS can change are very much alive and the role ICT will play in this transformation is high in the political agenda. Independently from who will shape the future of the NHS, it is quite clear that English healthcare providers will have more freedom in their ICT sourcing than in past. The big question coming with this greater freedom is: In the third generation technology platform era, does the English NHS have the capabilities and skills to successfully manage procurement?

In the period between 1980 and 2010 there have been 30 Parliament acts incrementally changing the NHS organisational model. Nevertheless, the unprecedented shift in the fundamentals of the healthcare ecosystem made unavoidable a more radical rethink of the NHS. An aging population, more and more affected by chronic diseases put an enormous pressure over a funded by general taxation system, now facing the effects of the economic crisis.

The consequences of this unbalance between demand and offer can be seen in the extreme episodes of appalling care, as in the case of NHS Mid Staffordshire Foundation Trust, and, more in general, in the shortfalls in standards of care delivered.

The year 2013/2014 is a critical one, as the Health and Social Care Act 2012 will be fully coming into force. However with general elections looming at the horizon, and the NHS being the most popular institution for the last six decades, it is obvious that this won't be the last chapter of the NHS evolution.

There are different views on the level of decentralisation to be achieved, the kind of role that the private sector should play, the funding model that will ensure sustainability and access for the next decade. Nevertheless, whoever will be in charge of shaping the future of the NHS, will need to move along the lines of personalisation, integration and industrialisation of healthcare services, looking for a holistic strategy including: greater patient empowerment; greater focus on public health and integration of healthcare stakeholders; and greater sustainability.

In this vision, the role of IT, as we have said many times, is not just that of an enabler but also a driver of change. This is particularly evident when we consider the advent of third generation platform technologies. Cloud, mobile, big data and social networks are promising a bright future, however yesterday mistakes can be right behind the corner. One of the factors that played an important role in the inglorious end of the National Programme for IT, along with the imposition of a top down approach to a quite decentralised structure as the NHS, was the poor management of suppliers and of the whole procurement process.

Today UK healthcare providers enjoy a greater freedom on the choice of IT systems and after the failure of the NpfIT it is unlikely that this will change in the near future.

Budget pressure will be also part of the new normal. CIOs will be asked to analyse and measure performance and to effectively support collaboration. They will be forced to look at the installed base and analyse the opportunity-cost ratio of continuing supporting the current systems instead of going for major consolidation and virtualisation and thinking at leveraging new, services based, technology delivery models.

Healthcare CIOs will be required to orchestrate sourcing between framework procurement schemes, shared services centres, and services providers. Third Platform brings new ways of procuring ICT as phenomena such as crowdsourcing, BYOD, and self-provisioning models are triggered by social, mobile, and cloud because of the advantages in terms of the time to market and reusability of solutions.

In this scenario, Health IT procurement changes dramatically. Healthcare CIOs have to develop strategic sourcing skills that because of the weight legacy, limited resources and an often inadequate role of CIO within the healthcare organisation, are not always easy to develop.

At the end of June The UK Department of Health published the second version of the “NHS Standards of Procurement". This document sets out the standards for NHS healthcare provider organisations to assess and benchmark procurement performance and identify areas for improvement. The document gives a valuable guidance for the overall procurement strategy, but its principles can be easily applied to the procurement of ICT services and products. It focuses on four elements: people, leadership, process and partnerships. Each element has a standard, describing the optimum scenario that has to be achieved following a 3 steps maturity model identifying the attributes for building, achieving and excelling in procurement performance.

The innovation brought by this tool is the focus on total cost of ownership of procured services and product and the impact of procurement in the sustainability of the NHS. The concept of sustainability in this framework should not be intended only in financial terms but also from a quality perspective, allowing greater business alignment and awareness within the organisation. Are IT departments of hospitals and primary care providers ready for embracing and fully understand this new approach?

There are already some leading organisations such as university hospitals / foundation Trusts which trying to move toward an holistic view of IT procurement , but the large majority of organisations are opting for a more conservative approach and heavily focused on the financial aspects because of the compelling budget cuts. Helping these organisations in finding their way to strategic sourcing of ICT will be the big bet for the next information strategy independently from who will win the elections and define it. What is your view?

Posted by Silvia Piai, EMEA Research ManagerIDC Health Insights / IDC Government Insights

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