Buying power

NHS National Services Scotland (NSS) dental director Paul Cushley talks about how the new DenPro group buying scheme has been received in the profession

29 September, 2016 / indepth
 Bruce Oxley    Scott Richmond

If your target audience at a stakeholder interest event leaves before seeing the presentation, normally you would see that as a worrying sign. Not for NHS NSS dental director Paul Cushley. He explained that, at the first interest meeting for the proposed DenPro group buying scheme in September 2015, he watched a handful of key dentists leave early, not because they weren’t interested, but because they had already decided to sign up.

He said: “We noticed when we did our interest evening initially that there were some big players who came in and said hello, maybe had a cup of coffee and left without staying for the presentation because they had decided on principle that they were going to be involved.

“They said the principle of combining together to collaborate, philosophically if you will, appealed to them and, even if they don’t get a great deal now, to be able to take their own destinies in their own hands and negotiate as a group is a worthwhile activity.

They that said to be able to take their own destinies into their own hands and negotiate as a group is a worthwhile activity

Paul Cushley (NSS) Dental Director

“So, there were one or two people who had what they would describe as being reasonable deals but they were prepared to take a punt on joining in. So, even if they lost a little money they weren’t going to grumble on the principle, but as it has turned out they have been quite happy as well.”

CDO’s brainchild

DenPro was the initial brainchild of the Chief Dental Officer (CDO Margie Taylor who started a discussion with NHS National Procurement (NP) on the possibility of group buying rubber gloves. Paul said: “Gloves are a constant source of difficulty. They are quite expensive, they’re disposable, practices are likely to purchase millions of them in any one year, and she initiated a discussion.

“As a result, NP said that it is actually easier for us to negotiate a full catalogue of goods than it is for just gloves themselves. So the CDO’s office commissioned NP to set up the process.”

Paul explained that, while there was already a process in place for the procurement of materials and sundries in the Public Dental Service (PDS), it was a small contract and the number of items in the “basket” were quite limited. As a result the overheads were finite. NSS was keen to get a full catalogue and opened it up for commercial organisations to bid on a basket of goods and in May, The Dental Directory (DD) was announced as the winner of the tender.

Paul said: “We wanted a full catalogue. We knew what the 400 most frequently accessed items were because we had already negotiated that for the PDS. So, we had a good idea of what the most used items were.

“But we wanted a full catalogue, a general dental practitioner doesn’t want to get some things cheaper here but for everything else go elsewhere.

So we really needed not just good prices but a full catalogue.”

The deal was structured so that the “core” basket of 400 items is subject to the biggest discount of 25 per cent, with a 20 per cent discount across the rest of the DD catalogue. Over and above that, during the initial phase, there is a five per cent credit rebate at the six-month point. Paul said: “We’re not at that point yet but the throughput has been quite good and we are quite keen to continue that guaranteed extra five per cent to make sure everybody is getting value for money.”

Commitment

Paul explained that the DenPro scheme has been limited to 400 practices for a number of reasons. As it was to be an NHS-run scheme, albeit with a commercial partner, it was felt that only those with a high commitment to the NHS should be allowed to join. As a result, practices have to have 80 per cent of their turnover derived from the NHS to qualify and, to remain on the scheme, they have to source 80 per cent or more of their sundries’ spend through DenPro. The only exception to that rule is vocational training (VT) practices, who have been admitted to the scheme regardless of how much of their income is derived from the NHS. However, if a practice ceases to be involved with VT, and they don’t have an 80 per cent commitment to the NHS, they would be removed from the scheme.

Paul said: “The idea of the 400 was that we needed to ensure that there was still room in the market for a degree of competition.

“Had we sought to increase that 400 we could have created a monopoly in the market which could have been difficult for us when we went back to renegotiate the deal. If there was only one player in town they have all the cards.

“So, while 400 may seem rather arbitrary, it does give you pretty much all the practices in Scotland that are 80 per cent or more NHS committed. That is just coincidence. The vast majority of the uptake has been from practices whose turnover is almost completely derived from the NHS. So, those practices in the most economically deprived communities that really rely on the NHS entirely for their income are those that are benefiting.”

And, while DD and NSS have agreed a maximum price level for goods in the catalogue, practices will still benefit from any ad hoc discounts or promotions that the company might run during the term of the deal. The contract is due to be renegotiated every two to three years with NSS carrying out regular checks and assessments.

Paul said: “So, it is not a monopoly, we are not saying you have to buy everything from us. If someone comes along with a better deal, that’s not a problem.

“We would like to have as many things as possible in the catalogue but the reality of the market is that there will be some items that practices will need to source outside of it. But that 80 per cent spend is what we are looking for from them.”

Assessment

As part of the deal, NHS NSS monitors sales and is obliged to ensure their commercial partner is “behaving appropriately”. NSS also has “unfettered access” to five per cent of the accounts in any calendar month, giving the opportunity to check sales figures etc. But, as Paul explained, the figures only give you the what, they don’t give you the why. In other words, the statistics won’t explain why some practices are spending more than others and they won’t highlight issues with the processes.

To answer these questions, DD reps have been visiting practices in order to get feedback and to show people how to use the online portal. Paul said that DD is initially concentrating on those with no or low spend to make sure there are no technical difficulties.

Paul said: “We know what spend has been across the board and there have been practices where the spend has been zero. They were either not accessing the correct portal or they hadn’t properly switched over. There were other practices who decided to go ahead but weren’t aware it was up and running. It might have been the case that the boss had made the decision but not communicated it to whoever does the ordering. So, it might have been an in-house problem that needed to be addressed.”

A focus group is being planned to get direct feedback from participating practices and Paul explained that, as the greatest concentration of useage is in Ayrshire, Greater Glasgow and Lanarkshire, that is likely to be their focus in the first instance. He said: “We have targeted high and low users and some in the middle, but we need to wait and see what the responses are because there is no point asking people to come along and only getting four or five. We need a spectrum of views, particularly for those that aren’t using it to the extent that we would like.”

Waiting list

The number of practices waiting to get onto the scheme has been as high as 30, but a recent “cull” has seen that number reduced to just four practices. Paul explained that the membership is under constant evaluation and they will try to make sure those on the waiting list don’t stay on there for an extended length of time. He said: “We accept that there may be some that have tried it and decided, for whatever reason, that it is not for them. There’s absolutely no animosity towards those practices, they are running small businesses, it’s a commercial environment. If they feel they can get a better deal for the range of products they need, then we are not going to cry about it. But for those people on the waiting list we need to get them involved as soon as we can.”

The number of practices has been capped at 400 and Paul insists there are no plans to exceed that. He believes that the number of practices that decide to increase their private income beyond 20 per cent and leave the scheme, will be balanced by the number of eligible practices that come to a point and decide to join up. He also explained that there are a number of practices who are keen to join but they will stay on the waiting list until they come above the 80 per cent mark.

Green deal

During the negotiations, one of the boxes that NSS insisted was ticked was the green agenda and, while Paul acknowledges they haven’t tackled packaging as yet, they have made inroads to the problem of returns. The carbon footprint on returns is naturally double that of products that are received and acceptable on first delivery and reps often pick up and drop off single items when there is an issue with the size or colour, for example.

NSS had previously been approached by the colleges that run dental nursing training – West College Scotland (formerly Reid Kerr), Edinburgh College (formerly Telford) and New College Lanarkshire (formerly Coatbridge) – to see if there was any scope to include them in the original deal. However, the colleges only need a limited number of materials for their students to practice on and at specific times of the year.

The Dental Directory have agreed to use returns to source the materials for the colleges at no cost, with any
potential shortfall being made up by the company itself.

Next steps

Paul said that, while there will always be hiccoughs in the early stages of any scheme, especially a national procurement scheme such as this, he paid tribute to the DD and NSS staff, in particular Marie-Claire O’Neill who has been dubbed “the Queen of DenPro” and who is in constant contact with DD.

Paul said: “We are up and running and we have good evidence that the portal is working. The throughput and spend has been better than expected, by both ourselves and DD. Although not everybody is 100 per cent happy, the testimonials and general feedback we have got in has been quite positive. The waiting list is still active and we hope that things will continue to improve as time goes on.

“We really need to effect a culture change where they are doing things online and they have a one-stop-shop for almost everything. When they are running low, they go there and they know they are getting a good deal. That’s where we want to be, we want to make sure that they feel they are getting reasonable value for money and they can concentrate on patients and forget about materials and things like that.”

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