Jin Sahota interview: How government procurement reforms are unlocking millions for the NHS

Written by Richard Johnstone on 15 February 2019 in Interview
Interview

Jin Sahota is the government procurement expert in charge of unlocking billions for the NHS frontline at a time of record demand. He reflects on three years of trying to get hospitals to work together – and the challenge of maintaining supplies amid Brexit uncertainty.

Photography by Louise Haywood Schiefer

At first glance, most of government would be jealous of the funding deal for the NHS. Agreed before departments had even begun to speak to the Treasury for the upcoming Spending Round, the health service will get an average annual increase of 3.4% over the next five years, meaning it will have an extra £20.5bn to spend by 2023-24. But it still faces difficult decisions. The pace of demand for healthcare has outstripped funding since 2010 and demographic changes mean the health service faces even higher demand in the future. To tackle this, the NHS Long Term Plan, published in January, set out plans to use the extra cash to unlock efficiencies worth 1.1% every year. Savings from the nearly £6bn spent on hospital consumables and common goods like syringes and gloves are high on the list, and the health service had already set a target to save a cumulative £2.4bn over five years by making the most of the buying power of the country’s most cherished institution.

The NHS – and government – has invested in commercial skills to help drive this programme and walking proof of what can be done when you invest to unlock savings is the man who is leading the initiative, Jin Sahota.

Sahota is head of the government-owned NHS Supply Chain Co-ordination Ltd (SCCL) procurement body and he has freed up millions for the NHS frontline since joining government in March 2016. But when he meets CSW he is candid about the fact that he wouldn’t be in the post were it not for reforms allowing for higher salaries for government commercial staff.

“I’ll be absolutely blunt: if the salary levels were somewhat different, maybe it wouldn’t have attracted me,” he says of his move from the private sector, where he was latterly senior vice president of worldwide operations with French multinational corporation Technicolor.

“One bit of advice I give anybody who comes in from the private sector is: understand why things happen in a certain way”

The ability to offer higher pay to recruit top talent was given to the Government Commercial Organisation when it was created in 2016. And Sahota, one of its first big recruits, says he wouldn’t be in place without it.

“That’s me being very honest and I think that’s probably true for lots of people that came in at a certain time with the government commercial function. It does attract people with the capability and backgrounds that we need in government.”

Sahota had shown interest in government before – “about 15 years before I had actually spoken to somebody in the Department of Health about getting some more private sector experience into the NHS, at which point I was told ‘we’re not quite ready’” – but when he was returned from a stint in Paris with Technicolor, he looked for a next challenge.

“Whenever you repatriate you think about doing something different, and along came this opportunity to work in the civil service,” he says. “I’d heard a lot about [civil service chief executive] John Manzoni, and I was very much interested by the government commercial funcion set up and getting private sector expertise back into the public sector.”

After an interview with Manzoni, Sahota was brought into government as a commercial director in the Department of Health and Social Care, with a mandate to transform the NHS supply chain.

He joined at an auspicious time – not only was the government commercial function up and running, but just the previous month, Lord Carter had published his report for the Department of Health examining the cost of variation in procurement and practices across the health service. The review concluded that as much as £5bn a year could be saved by 2020-21 through following a “model hospital” plan. [see box, right]

After this report, DH’s procurement transformation programme – led by Sahota – was set the £2.4bn savings goal by 2020-21 as it developed the new model for buying across the NHS.

The Carter review

The Carter review was commissioned by then secretary of state for health Jeremy Hunt in 2014 to review the extent of what was called “unwarranted variations” in performance across hospitals in England.

Labour peer Lord Carter of Coles concluded that the NHS could save as much as £5bn a year by 2020-21 by putting in place the best practice of what he called a model hospital and cutting the different range of costs paid across the health service.

Carter highlighted that average running costs for hospitals ranged from £105 per square metre at one trust to £970, while prices paid by different hospitals for hip replacements ranged from £788 to £1,590.

It estimated that it £700m could be saved through improved procurement practices, which led to the development of the cumulative £2.4bn target. Other recommendations included a People Strategy for the NHS and a target for trusts to ensure their administration costs to not exceed 6% of their income.

Medical supplies and equipment are bought across the health service in three ways. Hospitals can buy their own products, they can group together to buy collectively, or make use of the NHS’s own central buying agency.

At the time Sahota joined, around 40% of the purchases in the NHS trusts were going through the then-outsourced buying agency, NHS Supply Chain. He identified increasing this share as an immediate priority.

The private sector would call the three-way buying split “warring tribes”, Sahota says, “because we’re all competing against each other”.

This benefits suppliers, rather than the health service, because the collective buying power of the NHS is not being used, he says.

“It’s like every single different branch of Sainsbury’s buying things how they want, when they want. You wouldn’t allow that in Sainsbury’s, so why are we doing it in the trusts?”

Sahota and his team in the health department worked to change this through what they called the future operating model for buying. NHS Supply Chain was brought back in house, to be led by Sahota, while the views of 80 trusts were canvassed to find out what would encourage hospitals to use the organisation.

One key request was for transparent pricing. Previously anything sold through NHS Supply Chain had a margin added to it, to meet the organisation’s costs. But “what the trust really wanted was price transparency”, he says. “They wanted to know that if we bought it for £1, we were selling it at £1, as opposed to buying it for £1 and selling it for £1.10. They wanted to go away from a margin model towards a centrally-funded model, which is what we’ve been able to put in place.”

The group also worked to reduce the number of different products being purchased across the NHS in England, after a sample of 22 trusts revealed that in one year they used 30,000 suppliers, 20,000 different product brands and more than 7,000 people were able to place orders. “There was confusion as to what is the right product.”

However, just like procurement reforms in government, Sahota could only persuade, not compel, buying teams to change, and he realised the way to get hospitals on board was through clinical reviews. A clinical evaluation team of NHS lead nurses was established to do this  and – crucially – was not told the prices of products. This meant the team could convince hospitals to streamline their inventory with arguments on quality not price, says Sahota. They produced 32 clinical reviews covering 69 product types.

All this work has led to early progress. SCCL has only been back in the Department of Health and Social Care for 10 months, but Sahota has already overseen an increase in the amount spent through it from 40% to 51% of all NHS purchases. Overall, the programme has saved a cumulative  £344m so far, and “we are on the trajectory to deliver the £2.4bn”, he says.

Such a shift is “not because we waved a magic wand it’s because of the focus that we put on engaging with trusts”, Sahota says. “Instead of saying, ‘we’re here and if you want to buy something, come and buy something’, we’ve got bespoke account plans for each of the trusts, we’re building up pictures of what can be done, and we’re helping them switch products – which we know is not easily done.”

The NHS Long Term Plan set a target for greater use of SCCL, seeking to get its share of NHS purchases up to 80% by 2022.

Sahota tells CSW that “what I hear more often [from trusts] is: can you stop giving us a choice and just dictate the bloody thing, because then we wouldn’t have this other 50% still being done in a different way”. Although that day might come – “when you get about 80% of the market share, what’s the point of doing something different?” – unlocking those cash savings remains his immediate priority.

“In 2021, we will be delivering £600m cash-releasing savings per year. That’s £50m in cash-releasing savings per month that go to frontline services. It doesn’t come back to me, it doesn’t go back to the department, or even government. It goes back to the NHS, to frontline services where it belongs. That’s phenomenal. We are on that trajectory, and it’s great to be part of it.”

“The savings don’t go back to the department, or even government. They go back to the NHS, to frontline services. That’s phenomenal”

This is not to say it has all been plain sailing. Sahota has had five different ministers overseeing the plan since he joined government, and the programme has also been buffeted by a snap election and Brexit planning.

Although he calls government “the best place I’ve worked for a very long time”, Sahota has also had to adjust to life in the civil service.

“When I joined from the private sector, somebody said it will take six months for an approval,” he says, smiling. “I giggled, thinking that would never be the case. But I’ve learned to really understand why things happen in a certain way and never to think it is for no reason.”

He jokes that he hasn’t yet quite got to the bottom of why some sign offs do take so long – “I think I understand about three months of it” – but he is serious about wanting to understand the reasons for government processes, rather than rail against them.

“It is a big government, there’s a lot of people and a lot of departments and there is a lot to be understood and to make sure that things follow a process,” he says. “There is a need to tick off all the different areas where, if something goes wrong, it might be an issue.

“The one bit of advice I give to anybody who comes in from the private sector is: understand the rationale behind why things happen in a certain way. Because once you get that, you stand a chance of working with it, and that’s what I did.”

And as well having helped get him hired in the first place, the government commercial function has been key to helping him adapt.

“I was actually coached very well,” he says. “On our board to start with, we had people from the Cabinet Office who were part of the GCF and that allowed us to navigate the system.

“The advice I got was: get to know some people, build some trust and they’ll always help you. And that is true. I have never not been able to pick up the phone to someone and say, ‘what do I do with this thing’?

“I wouldn’t have got that if it wasn’t for the GCF. Without it, we are back to the fragmented landscape I see in the NHS, but on a government scale.”

And this is not the only government organisation that has helped. Sahota adds the Infrastructure and Projects Authority has also been vital.

“Anybody doing a transformation [programme] must get the IPA on board and engaged if you can, because they help. I was slightly sceptical when I first did the IPA review, but if you do them properly, they really are useful.

“I’m doing that now as I’m a SRO for Brexit at the moment and the IPA is welcome.”

Ah yes, Brexit. Of all the unexpected events that have hit Sahota’s carefully-laid plans, this must rank near the top.

Indeed, Sahota says SCCL has “deferred some parts of our development that were non-critical, the nice-to-haves” to free up time to focus on ensuring supply of medical devices and clinical consumables after EU exit.

As he meets CSW in early January, he insists the organisation is well prepared “with the known variables that we have in front of us”

Having developed contingency plans, Sahota is now working to ensure they can be activated as needed. “We’re working with all our suppliers and ensuring that there are levels of preparedness on their side,” he says, adding that: “We’re in a better position than we could be if we hadn’t started on those plans some time ago,” he says.

Leaving the EU only adds complexity to already tangled web of different players across both government and NHS that Sahota has to work with.

“It is a challenge and it’s one of the reasons why I came in, but it’s not insurmountable,” he says. “It’s not difficult in terms of complexity, it’s just complex. You need to respect it as a complex thing but then deal with it in your own way – and make sure that you don’t allow the complexity to win.”

Working with suppliers

Sahota says there was some nervousness from suppliers to the procurement reforms as they “saw the landscape that they’ve enjoyed was going to change” through increased clinical evaluation of products.

However, he said that “slowly but surely, we had advocates in the system” as suppliers realised that the changes could make their job easier.

“They said, ‘this is actually going to help us, because instead of going to sell to different trusts, we could actually channel our products into a [procurement] category management that speaks the same language as us.”

SCCL worked to “make sure the suppliers understand what we’re doing and why we’re doing it” – ranging from large suppliers like Becton Dickinson, Baxter’s and Johnson and Johnson’s, to SMEs.

“We’ve met 243 suppliers just in the last seven months face to face. That’s a lot of suppliers, and when we get SMEs in, we do them in batches of 20. That’s the level of engagement it takes to get them to understand that this is actually an advantageous system.”

 

Correction: The version of this interview in February’s Civil Service World stated that NHS Supply Chain was rebranded as SCCL. This is incorrect. NHS Supply Chain is the name of the organisation that supports the NHS, while Supply Chain Coordination Ltd is the management function for NHS Supply Chain, which manages the contracts and performance of its providers that operates under the name of NHS Supply Chain.

About the author

Richard Johnstone is CSW's deputy and online editor and tweets as @CSW_DepEd

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