Value over cost: Rethinking NHS health tech procurement

August 15, 2025

Woman hands typing in laptop, glowing medical icons and AI diagnosis — image: ©ismagilov | iStock

The Health Tech Alliance explores how looking beyond costs to examine value-based procurement will impact health technology and innovation within the NHS

With the UK Government spending around £10 billion each year on medical technology, the NHS has one of the most diverse medical technology sectors globally. ⁽¹⁾ Despite this thriving landscape and new health tech innovations coming to market daily, there is widespread agreement that the procurement of technology is often slow, fragmented, and difficult to navigate. Companies developing new technologies and innovations face an unclear and protracted procurement pathway, which can often take years to reach patients and clinicians. The way and speed at which the system buys and adopts technology can significantly impact patient outcomes, delaying access to game-changing treatment and ultimately exacerbating long waiting lists.

Current barriers to health tech procurement in the NHS

The procurement landscape is complicated. Suppliers, especially small and medium-sized enterprises (SMEs), face overlapping frameworks such as PCR15, the Procurement Act 2024, and NHS Commercial standards, as well as shifting guidance and inconsistent processes. A supplier might spend months or even years working through tenders and approvals, only to discover that requirements differ from one trust to another. Even with national frameworks in place, the route to adoption is not always clear, and advice can be contradictory.

For SMEs and innovators, navigating the system can be even more difficult. They may lack the resources to navigate complex bidding processes or sustain engagement across multiple trusts. With so many hoops to jump through, some of the most promising technologies never make it to the patient.

The situation is equally challenging and frustrating for procurement teams in NHS trusts. Staff shortages, budget constraints, and rising demand mean teams are under constant pressure. The focus often shifts to immediate savings, pushing trusts to choose the lowest upfront cost rather than considering long-term value. Clinicians who hold valuable insight into patient needs and technology benefits are sometimes left out of early procurement discussions. This siloed approach slows innovation and limits the ability to tailor solutions to clinical challenges. The unfolding situation with NHS England’s absorption into the Department of Health and Social Care is also creating further disruption within trusts, with so much still unclear. ⁽²⁾

Moving from cost-driven to value-based procurement and how this change is essential for sustainable growth in the health tech sector

There is growing recognition that the current focus on short-term cost savings is not serving the NHS or its patients as well as it could. Value-based procurement (VBP) is an approach that looks beyond short-term cost savings and weighs up the broader impact of technology, such as whether it improves clinical outcomes, frees up staff time, or delivers savings over several years by reducing hospital admissions.

This shift from cost-driven to value-based models is crucial. When procurement decisions take a broader view, the NHS is better placed to adopt technologies that tackle the root causes of inefficiency and drive meaningful change. For example, remote monitoring solutions can help patients manage chronic conditions at home, reducing the need for hospital stays and freeing up beds for more acute cases. Surgical robotics and minimally invasive devices can cut down recovery times and complications, while data-driven tools can identify and flag risks before they escalate.

It is not just about clinical outcomes; by supporting innovation and making it easier for SMEs to work with the NHS, VBP can help grow and encourage investment in the UK’s health technology sector. This benefits both public spending and the wider economy.

Practical solutions and recommendations for making value-based procurement the norm

Based on the insight from a series of collaborative meetings between senior NHSE procurement directors, clinicians, industry representatives and policymakers, our recent report outlines practical steps that can be taken to accommodate this shift:

Simplify and standardise processes

A central database of approved frameworks, clear templates for business cases, and a single supplier registration portal would make it easier for both buyers and suppliers. Better signposting and practical guidance, especially for SMEs, can help demystify requirements and open doors to new market entrants.

Invest in training and knowledge sharing to build confidence in value-led procurement

Procurement decisions are frequently driven by achieving the lowest short-term price and cost savings rather than assessing total value or long-term outcomes. Procurement and clinical staff need support to assess long-term value and outcomes, not just price. Sharing best practices through national webinars, case studies, and peer learning can help procurement teams feel confident in making value-based decisions.

Ring-fence innovation budgets at trust and ICS level

This would ensure that new solutions are not squeezed out by short-term financial pressures. Early engagement between clinicians, procurement leads, and suppliers is vital for identifying the right problems and shaping specifications that focus on value, not just cost.

Produce national guidance

This would reduce duplication whilst striking a balance between national constituency (to ensure efficiency, transparency, and shared learning) and local flexibility (to meet specific patient and population needs). Not every solution will suit every trust, but a clear set of minimum standards, with room for adaptation, can help reduce duplication while meeting local needs.

Procurement is more than a back-office function; it is a driving force for patient care, innovation, and economic growth. The NHS’s willingness to spend on medtech is not in doubt, but the way those investments are decided shapes which innovations reach patients and how quickly the benefits are felt.

With new policy frameworks like the Procurement Act 2024, the consolidation of ICBs, and a growing appetite for reform, there is a real opportunity to create a procurement system that rewards value, not just price. By clarifying routes to adoption, supporting early engagement, and investing in skills and culture, the NHS can unlock the potential of health tech for patients, staff, and the wider health system.

The Health Tech Alliance is a coalition of health technology companies and bodies from across the NHS and wider health system. It is chaired by Dame Barbara Hakin, the former Deputy Chief Executive of NHS England, who is working collaboratively to increase the adoption of health technology across the health and care system. Our insights are based on our recent procurement workshops series, which brought together industry, NHS leaders and procurement leads to discuss the challenges and opportunities of more effective procurement models.