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Interview with a Purchasing Director

 

The Other Side 15:

Interview with a Purchasing Director

Matthew Oxley is a Purchasing Director for Nuffield Hospitals. On Target talked to him about his experience of purchasing for the private healthcare market.

1. How much of Nuffield Hospitals’ medical equipment purchasing is decided on a national basis, and how much is decided by individual hospitals?

Broadly speaking, 80–90% of our medical consumables are purchased against a national standard. We expect, monitor and measure the compliance of individual hospitals: General Managers and their teams are charged to comply with these standards.

To help decide these standards, many of our clinical staff are regularly involved in user-testing products to determine the best specifications for clinical efficacy. This allows us to drive the decision-making from a clinical perspective, but equally important today are the commercial implications – which have traditionally been neglected within the healthcare sector.

In terms of major equipment, we have recently launched a programme to invest in diagnostic and radiology equipment. The investment will be in the region of £50 million over the next five years. We’ve driven this centrally, which is the most appropriate way to secure the best equipment and the best deal for Nuffield Hospitals. There are instances where we still allow some individuality at hospital level, but that is disappearing.

2. What are your main clinical and commercial priorities when doing business with medtech companies?

Clinically, we need to ensure that our consultant community are happy and comfortable using the product, and that its efficacy has been proven through the normal supporting data that we look for: patient data, British standards and independent clinical data.

Commercially, we would look not just at price but at what value is added by the supplier. For example, within consumables we would explore stock management: some of our hospitals are too small to hold a lot of stock, so we would look at how the supplier can accommodate our business in that respect. We would also hope to put in place an arrangement that will last at least two to three years.

3. What do you find helpful in the sales and marketing approaches of medtech companies? What do you find unhelpful?

It is very unhelpful when companies are arrogant and believe the world is still consultant-led. While it is necessary to ensure that consultants are using products that are best in market, fit for use and clinically effective, it is not necessary to allow them choice beyond what is based on objective criteria. Often the supply base are still encouraging consultants to dominate the decision-making and try to maintain these dynamics in their favour, which I find frustrating. The healthcare world has needed to address this for some years. It has been proven many times that where there is consultant dominance in the choice of product, the price is often higher than it should be in a competitive market – which is ultimately unhelpful to the patient and the current financial crisis in the NHS.

 The companies that work best with us are ones like Stryker, DePuy and Molnlycke, who actively engage with us in long-term strategic partnership. They work with us to help drive compliance, and they engage with our clinicians and consultants to reinforce why we have made certain product decisions. They work with us on price and commissioning arrangements.

The companies that want to work with us in the long term get under the bonnet of our business, understand the pressures and drivers that we face, and can put a proposition forward to reflect that. Where sales and marketing approaches are just going through the motions with our procurement team – you can spot them a mile away – that is often a route to not getting a contract.

4. How do you see Nuffield Hospitals’ medical technology requirements changing over the next few years?

Massively. Particularly in the private sector, it is always a huge driver to go forward with state-of-the-art technology. However, I think we are starting to shift towards a more balanced view of investment in medical technologies. We want to have confidence in clinical efficacy and advance patient care, but not just provide something because it is the latest thing.

When looking at multi-million pound investments, we also want to ensure that they are as future-proof as possible. You do not want to spend that much and find three years down the line that things have moved on and you are no longer “with the programme”.

This is why we are interested in looking at lease arrangements that help us keep in step with medical advancements, without exposing us to unnecessary financial risk.

5. How is the private healthcare sector changing, and how does this affect it as a market for medical devices?

The patient choice programme will be vital to us. The GP referral route into the extended choice network (ECN) is no longer a referral from a consultant. It is a contract with our hospital, which in turn helps us drive standardisation and product rationalisation within our supply base; it makes our relationship with our consultants more equitable because we are bringing the patients to them, and it therefore provides a useful context for our discussions with non-compliant clinicians.

The companies that want to work with us in the long term understand the pressures and drivers that we face, and can put a proposition forward to reflect that. Where sales and marketing approaches are just going through the motions with our procurement team – you can spot them a mile away – that is often a route to not getting a contract.

The ECN is just one of many changes in healthcare that have created opportunities for medtech companies to work with us in a more deep and meaningful way, rather than bypassing the private hospital and directing their efforts towards the consultants.

6. Finally, what advice would you give to medtech companies who are trying to sell their products to private healthcare providers?

Treat the purchasing department as a growing profession in any organisation, and work with them, not around them.

 

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