Information Law and Data Protection
Our market-leading Information Law team regularly publish articles and updates addressing the ever-evolving Information Law landscape.
Considering the future landscapes of our cities
For all the latest news and comment on employment and pensions law.
We have acted for clients in the majority of significant product liability cases that have been decided in the UK over the last 35 years. Our product…
For all the latest legal and regulatory news and comment in health and social care integration
This collection looks at the latest news, comment and development on the law affecting mental health services. The law affecting mental health…
Events and online training for the health and social care sector.
For all the latest news and comment in clinical negligence healthcare law
This collection addresses the full spectrum of cyber security and data risk management – the zeitgeist of our age.
What is a Collection? A Collection is a selection of features, articles, comments and opinions on any given theme or topic. It allows you to stay…
The Accountant's Liability Collection brings you topical news and insight of interest to accountants, actuaries, trustees and other financial…
Technology, brands and intellectual capital are key assets for any successful business. Our intellectual property (IP) team are experts at helping…
DAC Beachcroft's LatAm Quarterly Newsletter discusses topical news and issues in Latin America
Welcome to the Construction Risks collection. This space is used to report upon issues of interest to those who seek to allocate, manage and reduce…
The Solicitors' Risk Collection addresses issues and developments affecting legal practitioners, and the professional indemnity insurers of legal…
For all the latest news and comment in clinical regulatory healthcare law
This collection looks at our Safety, Health and Environment Team and the products and services they can provide. In the climate of increased…
For all the latest new and comment in tax law.
This collection contains DAC B eachcroft's latest report, The Route to Integrated Healthcare , which provides the first practical examples of how…
The European General Data Protection Regulation (GDPR) came into force on 25 May 2016. A rewrite of European data protection law, the GDPR imposes…
The Insurance Act 2015 comes into force in August 2016 and will represent a significant change to insurance contract law in this country. This…
For the latest news and comment on Corporate, M&A and Equity Capital Markets.
Find advice, commentary and thought leadership on all aspects of Director's & Officer's Insurance; from contract formation through to complex…
For all the latest news and comment on employment and pensions law.
Considering the future of housing
Considering the future of retail
The GC Collective collection offers insight and comment for General Counsels (GCs) and in-house legal teams.
Organisations face ever-increasing expectations from Government, regulators, customers or service users, and other stakeholders, so scrutiny and…
For all the latest news and comment in corporate regulatory healthcare law
For all the latest news and comment in employment and pensions healthcare law
For all the latest legal and regulatory news and comment in healthcare estates and facilities management
For all the latest legal and regulatory news and comment in health technology
Legislative changes are bringing major changes to the Insurance landscape. This collection houses DAC Beachcroft's alerts on the pertinent issues.
The Insurance Market Conditions and Trends report is DAC Beachcroft's insurance sector flagship publication. Now in its tenth year, the report…
In response to client suggestions and requests, DAC Beachcroft's insurance sector flagship publication.
DAC Beachcroft Dublin specialises in insurance, professional indemnity, defendant personal injury, health, commercial litigation and employment work.…
For the latest news and comment on public procurement law.
For the latest news and comment on banking and finance disputes.
Analysis, commentary and checklists on the legal and governance implications of Brexit on businesses operating in, and trading with, the UK
This collection looks at the latest news and comment on commercial contracting healthcare law. With the health and social care sector under…
This collection looks at the latest strategic, commercial, regulatory and negligence legal and advisory news and comment in health and social care. …
Published On: 8 September 2016
The Carter Report, published in February 2016, was emphatic in its requirement for Trusts to achieve efficiency savings and consistency. It highlighted the wide range of cost differentials for similar services or products, especially in the context of pathology and imaging. Now, all Trusts must ensure that their pathology and imaging departments achieve their benchmarks, as agreed with NHS Improvement, by April 2017. And for more general procurement, Trusts must commit to the Department of Health's NHS Procurement Transformation Programme to increase transparency and achieve a reduction of at least 10% in non-pay costs across the NHS by April 2018.
Here, we look at the increasing use of managed service contracts to generate these efficiencies, and discuss the best approach to putting these contracts in place.
The Carter Report confirms an uncomfortable truth but is probably of little surprise to those familiar with the NHS. Implementing the recommendations is no small challenge and comes at a time of ever-growing demands and the need to manage healthcare costs.
With diagnostic imaging and pathology integral to most patient pathways a failure to invest in new equipment risks both an adverse impact on the quality of clinical care, and lost opportunities to make operational improvements. As a result, many Trusts are exploring and putting in place managed services contracts in order to realise these clinical, operational and financial benefits.
Typically, a managed equipment service is a flexible and specialized partnership with a service provider that ensures a Trust has access to innovative medical technology and equipment and a range of related services. The service provider should manage all of a Trust's equipment concerns such as ownership, provision, purchase, installation and commissioning, user training, asset management, maintenance and ongoing replacement and disposal.
The services are generally provided for a fixed monthly unitary charge for the entire contract duration.
The objective of these contracts is to smooth out the peaks and troughs of payment obligations and provide more certainty around capital. Some managed services will involve considerable management (by the provider) of sub-contractors, others may lean more towards a single provider model depending on clinical requirements.
However, there is no one size fits all. Simply calling something a managed service does not make it so, and any financial benefits (including any incidental VAT recovery) will depend entirely on the nature, structure and level of risk transfer of the managed service solution. Trusts should carefully consider how the inclusion of consumables works within such contracts and must be cognisant that although such benefits are possible, they are not a given.
Unfortunately, we sometimes see poor service offerings masquerading as “managed services” but failing to deliver tangible clinical or financial benefits; suppliers can "promise the world" but then be reticent to underwrite this contractually.
However, "done well", a managed service can deliver clinical, operational and financial benefits.
There are clear clinical benefits that managed contracts provide to quality of care and patient pathways; clinicians can ensure that equipment meets their agreed specifications and will be replaced on schedule to remove the risk of having to rely on old or obsolete equipment. Trusts don't need to budget for capital, both on a planned and emergency basis. Response and fix times and uptime percentages can be streamlined and improved through the competitive process. It should facilitate clear contract management arrangements to deal with service implementation and on-going provision so the Trust can focus on clinical activity and input. It should enable better planning to be realised on a predictive rather than a reactive basis. And suppliers can sign up to KPIs based on agreed savings percentages each year, and take over general procurement responsibilities for all sorts of provisions.
However, to achieve the benefits, contracts must be carefully negotiated and drafted; there can be risk due to the long-term nature of such contracts. Technology can change and become cheaper over time and contractual protections are necessary to ensure continuing value for money. The contracts should "work" to facilitate the achievements of operational, clinical and financial benefits, rather than simply adding layers of bureaucracy and costs to the procurement process.
Many managed service contracts are subject to the Public Contracts Regulations 2015 and Trusts will need to decide the right procurement procedure from the outset.
Once a procurement route is selected, a Trust is legally bound to follow it; therefore, the quality of the framework and any potential advantages or disadvantages should be carefully considered so as to optimise the route to procurement and minimise the risk of challenge under EU law.
We advise Trusts to consider:
A good framework should provide robust contract terms, shorter time frames, access to the right market players and stringent evaluation. However, if a framework has not specified call-off rules or contract terms this can be problematic. Perceived economic and time benefits can be lost if there is a challenge under EU law resulting in escalating costs and risks.
We have a number of what we would describe are “typical” managed service contracts. These have been developed from numerous projects and reflect our understanding of MES development and the various supplier pools. We also advise on established and well run MES frameworks.
Our contracts are drafted to facilitate project specific considerations reflecting latest NHS guidance including risk transfer and contract structure for VAT recovery. We always advise Trusts to “walk through” the proposed contract with us so it can be fully understood and project specific instructions can be obtained. This also helps in the formulation of evaluation criteria for the procurement. We also provide advice on how to structure the procurement and how to ensure that all advisers and Trust personnel understand relevant requirements/constraints on it.
We advise Trusts to understand and engage with the market prior to procurement, understand and focus on requirements/drivers and apply a holistic approach in terms of clinical, technical, commercial and legal work streams. We aim to help our clients minimise the risk of a procurement challenge as far as possible. All this said, it must be emphasised that a well negotiated and well drafted contract is only useful if it is understood by the Trust and if the remedies within it can be triggered if required.
For successful contract operation it is essential that Trusts avoid knowledge gaps between the clinical, operational and financial teams that procure and negotiate the contract and those that manage it "on the ground" operationally. This way the operational management of the contract should achieve what the procurement set out to do and be clear as to a Trusts' remedies in the event it does not.