[How long before this system is used for medicines procurement?   Dispensing doctors and pharmacists should beware.     Read on.   Ed]

Realising the benefits of collaborative procurement
  
The collaborative procurement model for healthcare purchasing is set to expand across the country and for laboratory and medical equipment suppliers that could present excellent opportunities, according to a specialist legal adviser.
  
Charles Hugh-Jones, partner and healthcare specialist at Hempsons explains:  "The model, which has been trialled through pathfinder schemes in Greater Manchester, the West Midlands and Staffordshire, is set to be rolled out nationally, with new hubs likely to be based around the newly configured strategic health authorities.
  
"This could mean the establishment of 11 hubs, with the existing pathfinder schemes joining forces with neighbouring healthcare providers to form much larger organisations, with potentially huge collaborative purchasing power.  This is good news for laboratory and medical equipment suppliers if they can fulfil the key objective behind the creation of the hubs: to demonstrate immediate and longer-term savings for healthcare providers.  Although some suppliers have voiced their concerns about cost being the only manner in which suppliers are evaluated and put on panels, innovation and service delivery will play a vital part in selection.
  
  
"Additionally, if healthcare suppliers get the framework agreements right, strong partnerships will be formed with providers, through commitment to contracts and a focused route into the health economy.  Suppliers should benefit from a clearer system for selling, with more co-ordination, less duplication and fewer fragmented orders.
  
"With the exception of staff costs, buildings and clinical services, collaborative procurement bodies will be charged with the responsibility to demonstrate real savings and value for money across every other product and service: from paper clips to x-ray equipment", said Charles Hugh-Jones. He adds:
  
"Participation so far has not been compulsory for NHS organisations. Individual organisations retain the element of choice, but it would be naïve to think that there will not be subtle pressure brought to bear to help all members of the hub optimise their purchasing power and achieve any potential volume.  Also, with the recent moves to finalise a deal with Novation and DHL taking over NHS Logistics and some of the Purchasing and Supply Agency's functions, this will further hasten the move towards a more robust 'approved' supplier market with streamlined selection processes from which NHS organisations are encouraged to source their requirements."
  
Charles says the key elements for any suppliers involved in a collaborative procurement agreement should be:
  
" Research thoroughly - laboratory and medical equipment suppliers should ensure there is a real demand for their commodity or service
" Demonstrate immediate and longer-term savings for providers
" Communicate fully - share information and don't be afraid to draw upon the experience of providers/suppliers elsewhere
" Include a full viability test across all collaborative contracts
" Agree clear expenditure thresholds with providers where bulk purchase discounts kick in and ensure all providers within the hub understand the savings they will enjoy by joining forces to reach those thresholds
" Ensure all framework agreements for the hub comply fully with EC procurement rules
  
Hempsons is adviser to the Greater Manchester Hub, has recently been appointed to the South Yorkshire Supply Management Confederation and acts for other national collaborative procurement groups (made up of both PCTs and NHS Trusts).
  
  
For further information please contact Christine Mortimer at MCG PR on e-mail  christine.mortimer@mcgpr.co.uk.

(25/8/06)