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Procurement Options

Procurement Options

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Published by alec fraher
This document details the fatal errors being made when developing new health care markets; Where service standardisation is assumed and service substitution used as leverage to make efficiencies with little or no mitigation designed into the overall service system.
This document details the fatal errors being made when developing new health care markets; Where service standardisation is assumed and service substitution used as leverage to make efficiencies with little or no mitigation designed into the overall service system.

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Published by: alec fraher on Aug 30, 2009
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09/29/2010

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Introduction
 The overriding aim of World Class Commissioning is aboutadding life to years and years to life. It is about creating theconditions for the optimal production of health andwellbeing.Procurement on the other hand is, in the main, aboutconstitutional requirements to satisfy the rules applying tocompetition. The objective of this project is to align the procurementframework with the production of health and wellbeing. The key issues identified for resolution in this study are:
How to set up a procurement framework that does notfetter clinical and managerial leadership nor confuse itwith incumbent stakeholder vested interest, eitherduring or in lieu of a competitive process.
How to close the gap between services to the individualand those that meet the needs of families andcommunities.
How to align the contracting and procurementframework with the policy intent of World ClassCommissioning and deliver improved productivity inhealth and wellbeing. This report has been produced for the third stage of thecategory sourcing programmes review control process, asdetailed in the Project Initiation Document.
 
It is the diagnosticaccount of the main issues and work that will be needed for effective marketdevelopment and market stimulation.
Background
 The work has been undertaken in two stages.Stage one looked at the demand side issues and thesematters are largely covered in the Project Initiation
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Document, titled Successful Futures, Positive Futures and areadvanced in the NHS SOTW Road Map, titled, 'RethinkingRelationships'. Both documents are available online at:
 Stage two examined the supply chain and focused onprovider impact, market position and strategic relevance. This part of the programme involved an assessment of theproviders ability and agility to meet and successfully executecommissioning strategy.Included was spend and patient flow analysis, as well as areview of the overall market structure, competitive dynamicand provider behaviour.
Findings – stage one and two.
 There are three main learning points.Firstly, that the introduction of competition in areasconcerned with clinical and managerial leadership is counterproductive and works against joint supply.Secondly, services are conditioned to meet the needs of individuals and fail to look beyond that which theirorganisation, alone, can provide. This does little to addressthe needs of families and communities. Thirdly, commissioning models based solely on supply sideservice substitution, will in the long term, fail to meet theuniversal service obligation.In short, this method of commissioning is flawed.
Discussion Points
World Class Commissioning is surprisingly silent on the roleof competition when buying health services, other than tosay the threat of competition is needed. This leaves it tocommissioners to work out the extent to which competitionis used and which competition model applies. Nevertheless,commissioners must at all times comply with the law.Where does this leave us?
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