What Value-Based Procurement Really Means for Digital Health Startups (and Why Now Is the Time to Get Strategic)

Procurement contracts in the NHS

The NHS is in the midst of a quiet revolution in how it buys technology. If you’re a digital health business looking to scale within the UK health system, understanding value-based procurement—and the new procurement legislation that supports it—isn’t optional. It’s essential.

In this post, I unpack what’s changing, what it means for startups, and how to position your solution in a more strategic, value-led way.

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The Shift: From Price to Value

Traditionally, NHS procurement has often prioritised cost-efficiency—products that offered the lowest price, rather than the best long-term impact. But with complex challenges like waiting lists, chronic conditions, and staff shortages, this approach is no longer sustainable.

Value-Based Procurement (VBP) is a more holistic method. Instead of asking “How much does this cost?”, NHS buyers are now asking “What value does this deliver across patient outcomes, system efficiency, and long-term sustainability?”

This shift is driven not just by clinical needs, but by legislative reform.

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New Procurement Legislation: What’s Changed?

The Procurement Act 2023, that came into force in October 2024, has prompted big changes to how the NHS - and public sector more broadly - procures goods and services. Under the new rules:

• The ‘Most Advantageous Tender’ (MAT) will replace the ‘Most Economically Advantageous Tender’ (MEAT), meaning value—not just cost—can be prioritised

• There is greater flexibility for NHS buyers to consider innovation, social value, and outcomes

• Transparency and pre-market engagement are encouraged, offering more entry points for suppliers

• Simplified frameworks and reduced red tape aim to level the playing field for SMEs and innovators

Whilst NHS orgs are still working out how to apply the new Procurement Act to their budgets, and getting to grips with the new expectations, this will be the golden-standard of procurement very soon. For digital health companies, this is a window of opportunity - but also a challenge.

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The Upside for Digital Health Startups

If your solution improves health outcomes, reduces system pressure, or enhances patient experience, you’re already aligned with value-based goals. The new legislation offers:

• A chance to compete on the quality of your outcomes, not just the price of your product

• Opportunities for earlier engagement through soft market testing or PIN notices

• A more receptive environment for pilot evidence, co-development, and proof of value

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But Here’s the Catch…

The NHS still needs to see clear, measurable value. Many startups struggle to articulate their benefits in NHS language - beyond just product features or vague promises.

Some common pitfalls:

• Lack of robust outcomes data (clinical, operational, or patient-reported)

• No alignment with ICS priorities, GIRFT programmes, or QIPP goals

• Value propositions that focus on the tech—not the problem it solves

• Missing narrative around long-term cost-effectiveness or workflow impact

• No clear route for procurement officers to justify spend on innovation

This is especially challenging for companies without a strong NHS presence or track record, even if the product is brilliant.

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So, What Should You Do?

To win under the new model, digital health companies need to:

1. Reframe their value in terms of system benefit, patient outcomes, and real-world ROI

2. Map their offering to national strategies (like Core20PLUS5, ICS priorities, or elective recovery plans)

3. Build internal understanding of NHS procurement processes and key decision-makers

4. Package pilot results as evidence of value - not just proof of concept

5. Engage earlier and more strategically, not just at tender stage - Stotles has confirmed that companies that engage at the pre-tender engagement stage are significantly more likely to win contracts than those that don't

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Let’s Solve This Together

I work with digital health tech companies to untangle NHS procurement complexity and shape value-led commercial strategies that resonate with NHS buyers.

If any of this resonates with you - if you’re unsure how to position your product under the new procurement framework, or want to strengthen your pitch to commissioners, let’s talk.

I'm offering discounted 30-minute problem-solving sessions to explore how your business can better align with value-based procurement in 2025.

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