16 May 2022

Analysing healthtech spend: Trends and opportunities

On 12 May, techUK partnered with Tussell, provider of data on public sector contracts, to organise the latest event in the Trends & opportunities: Analysing healthtech spend series. We were delighted to hear from Gus Tugendhat, founder of Tussell, as he shared the latest findings from their research into IT procurement trends across the NHS in England.

He began by setting out the size of the overall market, stating that reported healthcare procurement spending on IT has surged since the inception of the Covid-19 pandemic from £1.4bn in 2016 to £2.2bn in 2020 and beyond. Gus explained that it is still unknown as to whether this constitutes the ‘new normal’ for the market, given that we’re still grappling with the challenges posed by Covid-19.

His presentation then explored the main drivers of demand, with the increase in spending driven by the surging volume of new contracts, rather than an increase in pricing. Delving a bit deeper, it appears that despite the NHS accounting for around two thirds of this spend, its share of IT spend with SMEs is declining, whilst over the past three years, all regions outside of London have witnessed a faster growth in spend than the capital. It was suggested, however, that the competitiveness of suppliers may be of more importance than where they are based.

A closer look at the technologies being procured reveals that ‘emerging tech’ accounted for at least £60m of contract awards since 2020 (with Artificial Intelligence, AI, ahead by value).

The final element of the presentation focused on upcoming opportunities. In this, Gus broke down where the almost £500m of live healthcare IT contracts will come up for renewal in the next two years, spread across DHSC, NHS Trusts, National Board, Commissioning Support Services, and Clinical Commissioning Groups. It was also mentioned that a core objective of the procurement reforms recently set out in the Queen’s Speech is to encourage more money to be spent locally.

A panel discussion followed in which attendees could ask questions and explore Tussell’s findings in more detail.

techUK’s Ten Point Plan for Healthtech made several recommendations focusing on procurement, from signposting suppliers to existing frameworks to providing an accurate estimate for their total value and ensuring specialist training for staff buying technology. You can read the report to find out more here.

Please contact [email protected] if you would like to get involved with techUK’s work in healthtech.