Concept to Commissioning - Part 1
Many entrepreneurs and businesses develop life-changing products and services that will benefit patients and models of care within the public sector.
Whilst winning that first contract can be the one to transform your organisation, the work required to become the successful supplier should not be underestimated.
Often, the problem for both the provider and commissioner is, the bringing together of two (or sometimes more) discreet organisations to make sweet music can be more akin to an embarrassing school disco!
Once in a while there will be a fluke of the right proposition presented at the right time, and you sail through a speculative bid process. More likely, however, is the demoralising fact that you will bid over and over again with no positive outcome.
To help understand why, here is a round-up of the key facts worth considering ahead of any opportunity.
The landscape is complex;
Cuts to Health and Care budgets are driving outsourcing for pragmatic rather than ideological reasons. This is a national picture but practice and pace vary at a local level.
Local Authorities are making short-term savings, mainly by cancelling non-statutory services and by looking for cost efficiencies in statutory services.
Commissioning consortia and frameworks are increasingly common, but there are doubts over their effectiveness and utility for both providers and commissioners.
Commissioners have no ideological preference for either private or third sector partners, focus is on what is the most cost effective-solution in each case.
The process is costly and technical;
A Centre for Economics and Business Research study in 2013, determined a competitive procurement process following a full EU procedure costs an average of £42,500.
The UK also has the longest public sector purchasing process, 53 days longer than the EU average.
Over the last 15 years I have seen almost every type of tendering process from both the commercial and public sector perspective, interestingly not one has looked the same.
Technically the process of every bid follows a structured path, however, the specification requirements, format of the submission documents and timings are all different.
Have you ever got all the way to finalising a submission and the portal rejects one tiny item?
**Note to Public Procurement leaders and Crown Commercial Services here**
Some standards around application process/format would be beneficial for the providers and yourselves.
I am sure savings would be made if all public procurement used a standardised format!
If even 2% could be saved through every NHS process this would amount to an enormous annual saving
of £242m for the average £12.1bn* gross expenditure on procurement.
(*Department of Health Annual Report and Accounts 15/16)
Preparation is the key;
Before even considering any bid, it is necessary to assess three key areas, these will help input into the overall commercial strategy for your business.
The type and shape of services demanded and valued, both today and in the future, by commissioners and potential other stakeholders.
Commissioning trends, both now and in the future, including key decision makers, key purchase criteria for services, preference for in-house vs. outsourced, bundling trends etc., and how these are influenced by budgets and wider government policy.
A review of the competitive landscape (including competitor performance, stated and implied strategies, key strengths and weaknesses etc.) across your service areas.
There are great opportunities too;
Once the approach and your business tender strategy is clear, there are many benefits to becoming a public sector provider.
The first one of course being income, fixed-term contract awards provide a revenue stream for a minimum of three years.
Adopting and developing new delivery models can achieve strong clinical engagement, broadening your customer base and other commissioning opportunities.
Lastly but by no means least, the proactive and coordinated care seamlessly delivered around the patient.