We blogged a couple of weeks ago about how Covid has acted as a catalyst to accelerate the use of tech in the healthcare sector. last week, HealthInvestor reported on the many examples of significant contributions of private tech companies to the NHS and wider care sector response to the pandemic.  

The adoption of new tech has been a necessity in the collective effort to respond to the pandemic. The uses have been widespread - including to analyse health data at a scale and speed not seen before in this country; to allow clinicians to communicate effectively; and to allow non-Covid patients with remote access to their GPs.

The current pace of procurement 

The pace with which the NHS and other healthcare purchasers have bought these new services has also been notable. Typically, the NHS is buying products and services without a formal, regulated procurement procedure, as there would be in non-Covid times. How? They are making use of an exemption in the Public Contracts Regulations known as the "extreme urgency" exemption (which we also blogged about - here: https://lnkd.in/dgMbcZf

This exemption allows contracts to be awarded "directly" to one or more providers without open competition. Whilst this approach does not evaluate what the products and services are capable of in the same level of detail as a normal procurement procedure would, it does ensure one important thing: speed. 

The pandemic has helped the NHS understand the potential tech benefits

In one way, the pandemic has inadvertently created an informal "market testing" period for healthcare providers. They are testing, in critical circumstances, tech that they have either not used before, or tech that they have used but not at such scale. The lessons learned from this process will be valuable. Where multiple similar solutions have been procured, tech users will be better able to identify the best-in-class products. Even when only a small sample of potential solutions have been procured, tech users will be able to understand how to use similar technologies in the future. The tech developers will also learn lessons - perhaps faster than ever before - and improve what they can offer.

But what happens after the pandemic?

Once these relatively short-term contracts have come to an end, the NHS will have some important decisions to make. Does it end those contracts and revert to the less advanced solutions we had seen in the past, or does it invest in new technologies for the long term, changing the way that the public accesses healthcare and the way it is delivered? At the very least, you would hope that where the tech helps bring savings and improvements in service quality, that the funding will be there to allow the public sector to invest.  

However, the "extreme urgency" exemption will not apply indefinitely. As explained in the earlier posts above, the threshold for its use is a very high one, and misuse of it could mean that a contract award is subject to procurement law challenge - which is neither in the interests of the NHS or other public sector buyer, nor a provider that has been awarded the contract. 

Instead, the NHS, DHSC and other buyers will typically need to conduct regulated tender processes or procure new framework agreements for repeat purchases. 

This also presents challenges. More than any other sector, tech evolves quickly and makes it vital that the procurement procedures and the contracts between purchasers and providers are flexible enough to allow for changes to be made to the services during the contract term. In particular, it is important that:

  • the public sector buyers take the time to understand the solutions that are available in the market and specify their requirements in a way that does not prevent access to the newest technologies in the future; 
  •  specifications should be output-based. This will allow the tech providers to come forward with the widest variety of solutions; 
  • evaluators must understand their obligations under procurement law - especially the requirement to evaluate the information in the tender response only, and not take into account less formal reports of how certain products and services may have performed in the past, during the pandemic. Equally, bidders must understand that good previous performance cannot be evaluated in a new tender process.
  • contracts should be drafted to allow for service flexibility, so that software updates and new versions can be delivered, without triggering a "material variation" to the contract. This is particularly important for longer term contracts, where the potential for change during the term is greatest. 

If you would like to discuss any of the issues above, or any other issues relating to healthcare and tech procurement, please contact Patrick.Parkin@burges-salmon.com or your usual Burges Salmon contact.