The NHS Malthusian Challenge — Purchasing and Beyond (Part 2)

This is the second in a three-part series from new guest author, Adrian Fawcett, Chairman of Healthcare Cost Recovery, the UK’s leading financial reimbursement specialist for the NHS. Part 1 is here.

Top-Down Alignment

With hundreds of disparate sites, systems and processes, improving, or more accurately, creating uniformity of good procurement practice in the NHS does not come with a magic wand. As outlined within the NHS England 5 Year Forward View there is a call for a layered tier of responsibility and commitment to shape the future of the National Health Service, encompassing everyone from system leaders, procurement professionals, frontline staff, patients and the public alike.

With this in mind, only with a top-down alignment between policy makers, boards, clinicians and frontline staff can a truly accountable environment thrive to create momentum in the following areas:

  • Strengthening of relationships between Procurement, the NHS Supply Chain, the Government Procurement Service and further use of the “Capital Equipment Fund” to ensure that procurement professionals have a true voice on future evolutions of these systems. It is estimated that these organisations, amongst others, influence 30 percent of NHS spending decisions, and so this is key to ensuring that there is an open dialogue around what purchasing professionals require to maximise both value and advice given.
  • Product substitution is estimated as having potential savings of more than 38 percent across the some £4.5 billion spent yearly on clinical supplies and services alone. To put it into contex,t NHS Supply Chain estimates that, if other products aside from the market leader were tried and implemented across the £25 million currently spent on sterile surgeon’s glove,s the NHS could save around £5 million.
  • Nurses often find thousands of pounds worth of unused medication in patients’ homes; the purchasing of increasingly expensive unused medicines currently costs £300 million a year. By devising robust systems and monitoring around the dispensing of medicines huge savings and reduced waste could become a reality.
  • GSI has called for a uniformed approach to barcoding across the NHS for both patients and inventory. Consistency in this area has already saved the UK retail industry an estimated £10.9 billion per year and it is thought material real savings could be replicated within the NHS.
  • Creation of a mature, consistent billing engine to allow for recovery of third-party healthcare costs, such as those facilitated by Healthcare Cost Recovery, for the recovery of treatment costs for third-party non-fault accidents. More than £700 million is not being recovered here alone.
  • If NHS trusts adjusted their HR policies to ensure the percentage of non-permanent staff moved progressively to within the national average of 4 percent of the workforce, the NHS could reduce £230 million of non-permanent staff expenditure. Locum use within some trusts has increased by 60 percent with some Locums reportedly charging up to £1,700 per shift.
  • Management Consultants charge the NHS about £1 billion per year. This could be radically reduced by Purchasing forging more transparent relationships with suppliers, allowing them to understand the core objectives so as to leverage their recommendations and skills and reduce the need for further consultancy in the future. For too long the wrong solutions have been bought and sold on the basis of a lack of dialogue.
  • Renegotiation of PFI deals in place needs to be made a statutory matter - and is a key way to look at reducing property costs/ finance charges. Within properties, simple changes such as fluorescent lights being replaced with high-efficiency luminaires are expected to produce a compounding savings each year for 12 years. Further use of the £50 million Energy Efficiency Fund can provide huge efficiencies to be reinvested back into patient care.
  • Future-proofing of talent should also take priority with a programme of graduate and apprenticeship programmes to attract a new commercially driven generation of procurement professionals and the retention of high performers and talent.

In part 3 we will look at five themes we could consider to promote real and long-lasting change.

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