Developing a public value healthcare procurement framework
| DOI | https://doi.org/10.1108/JOPP-13-04-2013-B003 |
| Pages | 476-515 |
| Published date | 01 March 2013 |
| Date | 01 March 2013 |
| Author | Alan Turrell |
| Subject Matter | Public policy & environmental management,Politics,Public adminstration & management,Government,Economics,Public Finance/economics,Texation/public revenue |
JOURNAL OF PUBLIC PROCUREMENT, VOLUME 13, ISSUE 4, 476-515 WINTER 2014
DEVELOPING A PUBLIC VALUE
HEALTHCARE PROCUREMENT FRAMEWORK
Alan Turrell*
ABSTRACT. This paper explores the potential application of public value
management theory to the practice of UK healthcare procurement. By
conducting a literature review, key elements of public value theory and
practice that can be applied to healthcare procurement are identified
together with mechanisms that can be used in procurement to protect public
values and enhance the creation of public value. These are formed into a
Public Value Healthcare Procurement Framework which represents a fresh
normative approach to healthcare procurement by focussing on a broader,
societal view of value; by providing a blue print for procurement leaders
centred around Moore's vision of “exploring” and “moral” public managers;
and by promoting a public service ethos amongst all providers including the
private sector.
INTRODUCTION
In the context of the UK Coalition Government’s NHS reforms as
contained within the Health and Social Care Act 2012 (The Stationery
Office, 2012a) and the subsequent Procurement, Patient Choice and
Competition Regulations (The Stationery Office, 2013) with their
focus on increased competition and the opening up of the healthcare
market in England, there will inevitably be increased healthcare
procurement activity and hence a focus on the procurement
competences of commissioners, which have already been perceived
as a significant weakness (Allen et al, 2009; NHS Confederation,
2010).
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* Alan Turrell, MA, MSc, is Head of Contracting and Procu rement of NHS
Walsall Clinical Commissioning Group. His research interest is in the
application of public value management theory to the procurement of
healthcare.
Copyright © 2013 by PrAcademics Press
DEVELOPING A PUBLIC VALUE HEALTHCARE PROCUREMENT FRAMEWORK 477
As Allen et al (2009, p.97) point out, the need for greater
attention to be paid to procurement in NHS commissioning mirrors “a
global shift in focus towards the strategic role which procurement
plays within the function of successful commercial organisations”.
This is a long-held concern (Kraljic, 1983; Ellram and Carr, 1994;
Reck and Long, 1988; Gordon Murray, 2002; Hughes and Day, 2011)
within the public and private sector. Within the NHS, Lonsdale and
Watson (2005 p.168) found that procurement was regarded as an
“administrative service function”, “expected to carry out the orders of
others”, with a key role being to help “with the European rules and
other such procedural matters”. Moreover, Allen et al (2009 p.100)
identify the need to develop “theoretical scaffolding” and “fresh
theoretical underpinning” for the practice of procurement within the
context of healthcare commissioning in the English NHS.
Public value may be summarised as an approach to the
management of public services, with an emphasis on the creation of
“public” value and hence a broader societal-wide conception of value;
a vision of “exploring” public managers aiming to create that value so
as to meet the needs of citizens as defined by their organisation’s
strategy and goals in the context of a political environment from
which authority is obtained; and a focus on ensuring that the
appropriate operational tools and resources are in place to ensure
delivery of public value and the measurement of the value created
(Moore, 1995).
In parallel to the debate about the role of procurement, the
concept and application of public value management is also much
debated. This centres around whether public value is seen as a
pragmatic, flexible tool (Alford and Hughes, 2008) suited to
addressing the ‘democrat deficit’ and the ‘delivery paradox’ (Coyle
and Woolard, 2010; Horner and Hutton, 2011) or whether it lacks
specificity (Williams and Shearer, 2011) and is hence “both
everywhere and nowhere“ (Oakley et al, 2006 p.2) and thus is in
danger of attack from the “validity police” (Alford & O’Flynn, 2008). In
their review of the concept to date, Williams and Shearer (2011, p.
14) conclude: “there is, as yet, little concrete evidence to suggest that
public value can be operationalized at the level at which it was
intended – that of the local decision maker and manager. Our
recommendation would therefore be that research into, and
478 TURRELL
evaluation of, the applicability of public value to the local strategic
management level would be the most logical starting point.”
It is therefore argued here that procurement, and the
procurement of healthcare in particular given the context of the
current NHS reforms (Department of Health, 2010a,b,c, & 2011a;
The Stationery Office, 2012a) provides an opportunity to apply public
value theory in this way and, in turn, the marriage of strategy,
legitimacy and operations offered by public value offers a much-
needed blue-print for the forward development and application of
healthcare procurement because it addresses those very issues: lack
of strategic context and direction; narrow definition of value; failure to
secure legitimacy for a broader role; and operational frailties; that
need to be tackled if procurement is to make a significant
contribution within the new commissioning landscape of the NHS.
Although the focus here is on the NHS due to the current reforms
in commissioning arrangements and their impact on the procurement
of healthcare together with the relative poor standing of the
procurement function, the public value approach presented in this
paper is likely to have broader application to other healthcare
procurement systems and to public procurement in general.
Despite the author’s contention that procurement and public
value “are made for each other,” the perception prior to this research
was that little connection had been made between the two in the
literature. This research therefore aims to fill this perceived gap by
exploring how the concept of public value could be used to enhance
the procurement of healthcare in the NHS by answering the following
questions:
- What is the concept of public value?
- How has it been applied in public organisations including within
the NHS?
- Has the concept been applied to public procurement and
specifically healthcare procurement, and if so in what way?
- Based on the above research, in what ways can the concept of
public value be applied to the procurement of healthcare and
what benefits could this have particularly in the context of the
current NHS reforms?
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