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  • 16th Jun 2021

Buying better: improving NHS procurement with behavioural insights

A&E waiting times, early cancer detection rates, shortages of intensive care beds, rollout of the new COVID-19 vaccine… These are all parts of the NHS which receive huge levels of interest from the public, and for good reason.

But behind the frontline of the NHS is an army of procurement staff working to ensure that hospitals have all the supplies needed to deliver care. Hospital procurement may never attract the same level of attention as other parts of the NHS, but it is nonetheless a crucial element of our healthcare system and one with clear room for improvement. Digital procurement platforms are often outdated and incredibly complex, making the job of procurement staff much more difficult than it needs to be. 

Why should we care about NHS procurement? Improvements in procurement efficiency could help save millions of pounds for the NHS each year. 

We partnered with the Health Foundation to apply behavioural insights to hospital procurement with the ultimate aim of improving efficiency by reducing errors and generating savings. 

Our extensive research identified three behavioural biases that are particularly relevant to this context. These biases can make it difficult for staff to make the best decisions about which products to buy and which suppliers to use, especially when combined with suboptimally designed digital procurement platforms.

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1. Choice overload

As the number of options presented to a person increases, their ability to select the best outcome can decrease. Faced with dozens of product options with complex trade-offs across different dimensions such as quality and price, procurers can be overwhelmed and as a result choose suboptimal deals. 

2. Risk aversion

In many situations people are particularly sensitive to low-probability but potentially high-impact risks. In the procurement context, a procurer may overorder an item or opt for an expensive delivery, even if there is only a very small risk of running out of the item, or the item arriving late. In some cases this may be perfectly rational if an item is of critical importance to patient care, but in other cases it could be avoided.

3. Status quo bias

People generally tend to prefer for things to stay as they are – the ‘status quo’. Procurers may find it easier to keep doing what they have always done. For instance, they could continue to buy products from a familiar supplier rather than searching for the most efficient option which may mean switching to a new and unfamiliar supplier.

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So how can behavioural insights improve procurement platforms? 

We identified four main types of behavioural interventions that could be implemented on digital platforms, based on two trials we have run over the past two years in which we found very promising results. In the table below we provide one example from our online experiments for how each behavioural intervention can be applied in practice, but there are many more examples in our short report.

Designing smart defaults

Defaults are preselected options that are realised if people make no active decision.

Example: Preselect optimal product alternatives where an identical option is available at a cheaper price for a given product, accounting for unit price, potential volume discounts and cost of delivery.

Simplify and harness friction

Simplification is the process of presenting information and designing processes and systems clearly.

Example: Make it easy to identify the most cost-effective options, by moving the cheapest items to the top of the product list or providing suggested ‘swaps’ for procurement officers, accounting for unit price, delivery costs and bulk ordering savings opportunities where possible to avoid missing ‘hidden’ costs.

Give feedback on costs

Feedback on performance is an effective way to improve decision making.

Example: Provide cost feedback, by highlighting how much purchasers have spent and/or could have saved if they had purchased cheaper alternatives.

Provide timely prompts

We attend to and respond to messages differently depending on when and where we see them.

Example: Highlight the optimal options (contractual, generic, good value for money) in a visually salient way at a key moment in the decision-making process, for example by the use of colour, icons or through placing optimal products at the top of search results.

Implementing these behavioural interventions will help to improve purchasing in the NHS. But we should not stop there. Going beyond digital procurement, behavioural insights should be routinely applied more widely across digital NHS systems and processes. For example, to improve digital patient records and care plans, digital self-management support tools for patients, and platforms used by staff to capture health and care information digitally at the point of care. 

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