The NHS is being urged to look beyond the headline price of medical products and weigh whether higher upfront spending can improve patient care and reduce long-term costs, after the value-based procurement approach drew cross-party support in the House of Lords.
The backing emerged during a recent debate on the Health Bill, where peers considered an amendment tabled by Labour's Lord Hunt of Kings Heath and supported by crossbench peer Baroness Finlay of Llandaff. The amendment would require ministers to report annually to Parliament on progress towards adopting value-based procurement across the NHS and social care in England.
Under the approach, purchasing decisions take account of patient outcomes, clinical benefits and the wider costs of care rather than the initial purchase price alone. It is already being introduced across the health service following national guidance published in June.
Pilot cited as evidence
Lord Hunt, a former health minister and longstanding advocate of the policy, said procurement exists to secure value for money for the health service but can do much more. The aim, he argued, is to move away from always choosing the lowest price and towards quality that improves patient outcomes.
He pointed to a pilot at South Tyneside and Sunderland NHS Foundation Trust, run with health and hygiene company Essity, in which continence products matched to patients' individual needs led to a 48% reduction in leaks and an 8% fall in product use.
Baroness Finlay, a professor of palliative medicine, praised the work of the Department of Health and Social Care's Medical Technology and Innovation Directorate and called for the approach to be adopted more widely. She argued that buying cheaper equipment could prove a false economy if it led to complications or further treatment, with the resulting costs often falling on different NHS budgets. She cited specialist cardiac pacemakers as an example of how more expensive devices could help prevent serious infections in vulnerable patients, potentially avoiding costly intensive care treatment.
She said it is clinicians who know that the cheapest is not necessarily the best, adding that clinicians understand the outcomes for particular devices and that this needs to be embedded in the tendering process.
Concerns over pricing thresholds
Conservative peer Lord Lansley, a former Health Secretary, warned that rigid pricing thresholds could prevent more expensive products from being properly assessed for their wider benefits.
Liberal Democrat health spokesperson Lord Scriven described the national guidance as a genuine step forward but cautioned that financial pressures could still encourage NHS buyers to favour immediate savings over better long-term outcomes.
Responding for the Government, health minister Baroness Merron reaffirmed its commitment to value-based procurement and confirmed that NHS Supply Chain had adopted a comply-or-explain approach for future purchasing frameworks. She said the intention was for value-based procurement to become routine when NHS teams purchase medical devices, consumables and services. The Government has also commissioned independent monitoring of the national guidance, with annual reports over the next three years to assess its impact.
The debate also exposed concerns about whether existing purchasing practice is consistent with the policy. Lord Hunt questioned NHS Supply Chain's recent decision to identify 79 additional product categories for potential inclusion in its Core List of standardised supplies, including urinary catheters and colostomy bags. He warned that these were highly personal products rather than standard commodities, and criticised the lack of prior consultation with relevant trade associations. Baroness Merron acknowledged the importance of products being tailored to individual patients but did not directly address the proposed expansion of the Core List, leaving questions over how the NHS would balance greater standardisation with its commitment to clinically led, patient-centred procurement.
Chris Whitehouse, a health policy lobbyist whose agency Whitehouse Communications worked on the amendment with Essity, said there was now great support for value-based procurement across political parties and a real desire to see it rolled out with momentum across the NHS in England.