Bespoke pay-per-use procurement to ease NHS financial burden

With mounting financial pressures across the public sector, many NHS Trusts are struggling to meet urgent infrastructure and equipment needs.

A lack of clarity around public sector budget allocation –means that many hospitals and medical centres are left with minimal options when it comes to investing in new infrastructure and technology.

This, coupled with challenges around meeting rising patient demand, ageing and unsuitable facilities, staff shortages and a lack of capital budget means that many NHS Trusts are looking for more innovative solutions to their investment and procurement opportunities.

How suppliers and key decision makers can respond

In a move aimed at providing financial relief for NHS Trusts and supporting suppliers, asset finance specialists, SAF Solutions, has launched a new pay-per-use (PPU) solution, a tailored funding option allowing Trusts to benefit from critical facilities and technology without upfront capital investment.

PPU allows NHS Trusts to utilise their revenue budgets for new investments, while also remaining compliant with IRS16 accounting standards.

Working alongside suppliers into the healthcare sector, alongside the healthcare providers themselves, SAF works to implement this tailored solution based on the estimated usage of the facility or equipment, to identify an accurate usage fee.

To support this innovation and provide public sector organisations with increased – and improved – investment opportunities, suppliers and key decision makers at NHS Trusts must embrace new procurement routes. For suppliers, this demonstrates heightened awareness of the financial and operational challenges faced by their end-users, while simultaneously offering NHS Trusts new options for making essential upgrades and investments.

“We’re well aware that growing patient demand, outdated facilities, limited budgets, and the introduction of the IFRS16 accountancy changes have made it increasingly hard for NHS Trusts to invest in new infrastructure.

“This lack of funding can lead to delays in critical new infrastructure projects (or even cancellations), which in turn leads to longer patient wait times and can impact overall quality of care.

“In response to the new financial requirements, alongside the challenges in securing capital budgets, a bespoke Pay-Per-Use solution helps Trusts to avoid these delays via a flexible finance model, meaning they only start paying for the facility once it is operational and being used.

“For the NHS, it allows access to essential facilities and equipment without impacting their Capital Departmental Expenditure Limit (CDEL) or breaching IFRS16 compliance. For suppliers to the healthcare sector, the PPU model simplifies and accelerates procurement, helping them overcome funding barriers and foster stronger, more sustainable partnerships with healthcare providers.

“This model offers flexibility and efficiency by allowing NHS Trusts and suppliers to pay only for what they use, based on an average usage calculation. This approach ensures that financial resources are allocated more accurately based on operational needs, allowing Trusts to respond to surges in demand, thereby avoiding unnecessary costs.

“However, we also recognise that this offers up a very different approach to investment for many finance departments within the public sector, and there may be some nervousness around navigating IFRS 16 accounting changes and other financial requirements.

“Finance providers should be working with suppliers and key NHS decision makers to educate them on these new solutions, helping them build a robust and compliant business case that eases potential concerns and ensures the investment can be secured.”

The benefits of a pay-per-use solution

First and foremost, a PPU solution helps to ensure that healthcare organisations can secure the investment needed for essential upgrades to infrastructure, technology and equipment.

For NHS Trusts, the primary benefits of adopting a PPU solution based on an average usage calculation are:

• NHS Trusts no longer rely on CDEL allocation, with PPU instead relying on revenue budgets.
• This new solution unlocks the opportunity to increase capacity through access to new facilities and equipment without upfront costs.
• Ultimately, this new investment leads to improvements to patient care via critical equipment or infrastructure upgrades.
• Crucially, unlocking this new investment will also help tackle waiting lists by expanding operational capacity quickly, without waiting for capital budget allocation, which can be a lengthy process.

For suppliers of modular construction and medical equipment, SAF’s PPU solution allows them to offer end users an appealing alternative procurement route, helping to accelerate sales and strengthen relationships with NHS Trusts facing capital constraints.

Alongside this, adopting a PPU Solution allows suppliers to:

• Shorten the sales cycle by removing the need for CDEL allocation, helping overcome budget limits and avoid funding delays.
• Enhance relationships by demonstrating a real and tangible understanding of NHS financial pressures, leading to long-term, trusted relationships with end users.
• Bolster authority and reputation among their customer base, by boosting suppliers’ reputation as adaptable and forward-thinking.
• Ultimately, a tailored PPU solution responds to the precise requirement of the NHS Trust and can be devised to align with their own internal strategy.

By linking costs directly to usage, the PPU model provides a scalable solution that grows or contracts with fluctuating healthcare needs. This prevents overspending on underutilised resources and offers greater financial flexibility, allowing Trusts to scale up or down as required without putting strain on their capital budgets.

This adaptability empowers Trusts to make faster, more agile decisions, addressing changing patient care needs without the financial burden or long-term liabilities associated with traditional procurement methods.

Further information on SAF Solutions’ pay-per-use funding model can be found here.