Procurement Technology and the Department of Health

We are getting increasingly worried about the Department of Health’s (DH) procurement strategy and approach, as defined by the central procurement team – not the group who do procurement for the centre itself, but the team that work across the wider NHS network. Many of the recommendations made in the August 2013 procurement strategy seem to have been delayed or totally stalled, and we reported on the loss of some key people recently.

We also reported here on the Carter report and the lack of the detailed “spend analysis” data we expected to see. We asked an FOI question about this, and discovered that Healthlogistics was engaged to do that analytics work, at a cost of £86,400. The reason they were chosen - “The supplier was selected as they had the most NHS Trusts from within the cohort of 22 using their spend analysis service”.

I must admit I had no idea they were used by so many Trusts for spend analytics. I’m probably biased as I know BravoSolution so well, but my guess would have been that they had more customers in that field, but perhaps not. Frankly, I don’t know much about Healthlogistics – we must go and talk to them, as they appear to have interesting products in a number of areas including e-catalogues as well as analytics. But anyway, it is good to know that the firm, where Conservative life peer Lord David Wolfson became a Director in 2013, was chosen for a reason that does hold some logic.

Then we have the case of GHX. The Colorado headquartered eProcurement firm held a major customer event recently in Arizona – very nice. And as one of our contacts in the US software world pointed out to us, speaking at the event was Steve Graham, who leads the NHS eProcurement strategy work. Now the Department of Health told us that they did give permission for his trip - “attendance was approved by the Permanent Secretary and relevant approvals were sought regarding purdah protocols”. The reference to “purdah” is because the event was just before the UK General Election, and civil servants are constrained in what they can say and do in the weeks leading up to that.

The Department also confirmed that “this was at the invite of GHX who paid for all travel and expenses”. (We also assume that the Department did not pay for his time during the trip, although we forgot to ask them that!)

However, the point is this. We wonder whether there might be some perceived conflict of interest now if the DH gets round to buying – or recommending – any particular software to the wider NHS? An all expenses paid trip to Arizona has a certain value, however you look at it. I’m not sure accepting that invitation, or approving it, was wise.

We were also told initially by the Department that “We are not aware of any links between GHX and our current staff or consultants” but then on further challenge they confirmed there is another link - Jason Hale.

“Mr Hale was previously employed by GHX leaving there in June 2014. His current role involves catalogue development for the Department of Health, and these are skills not readily available within DH. I can confirm he has no current connections with GHX”.

Now we’ve got nothing against GHX. They may well be a fine company. But we will be keeping a close eye on the DH and their thoughts on eProcurement, suppliers and systems.  Frankly, we don’t get the impression there are many people in the centre of the Department who understand much about procurement technology. So any decisions made, particularly if they have an impact on the wider network, need to be scrutinised carefully.

Voices (7)

  1. LM:

    I heard recentky that Steve Graham continues to turn up to public events as the ‘lead’ of the DH eProcurement Strategy. Are we to assume that Pat Mills, the DH Commercial Director, supports the idea of a member of his team embarking on an all-expenses paid trip to Arizona (sponsored by an organisation with a major commercial interest in procurement technology in the NHS) when he’s supposed to be assuring us of his team’s impartiality. I also hear that the entire team is still made up of interims and contractors when there are so many relevantly experienced and skllled practitioners in systems development in procurement across the NHS. Perhaps I should submit an FOI to Mr Mills myself and publish any relevant responses in the public domain.

  2. Sam Unkim:

    So in summary. The central procurement team, have thrown all their Ostrich eggs into the one basket of Lord Carter’s “model hospital” and nothing else is going be delivered by them ?

  3. NHS buyer:

    The Atlas of Variation. Now there’s a trip down memory lane for all of us. The most vehemently hated initiative ever to have been launched by the DH. It is remarkable that this team has been allowed to continue making so many mistakes in an area where the success of achieving so many efficiencies is so dependent on so many procurement practitioners across the NHS.

    Trust level data isn’t very good (as ‘anonymous’ has implied). It is true that some of us haven’t waited for the DH to get its act together and have deployed our own robust spend analysis technology (like Bravo) which has generated a line of sight across spend categories to the extent that opportunities are being exposed and subsequently pursued.

    But I’d like to take us all back to the promises contained within the eProcurement Strategy (published in April 2014 – 15 months ago – against which no progress has been made – see below).

    Relevant extracts from the strategy…

    [extract]
    Better Procurement, Better Value, Better Care included an action to “develop, procure and implement a single, best-in-class NHS Spend Analysis and Price Benchmarking service”. DH will establish a Task & Finish group to determine the detailed specification and supply route to support the acquisition of a national data service and supporting services. DH will establish the data service during 2014, which is expected to be operational from April 2015.
    Procurement intelligence falls into three principal areas:
    1) Spend analysis – to enable an NHS provider to scrutinise internal expenditure and prioritise areas for procurement action;
    2) Price benchmarking – to enable an NHS provider to compare prices paid with other NHS providers and prioritise areas for action;
    3) Spend recovery – to enable an NHS provider to examine historical payments to identify and correct duplicate payments, overpayments and unclaimed VAT.
    As part of the transparency guidance, all NHS providers will be required to electronically submit a monthly file of all accounts payable and purchase order transactions to the national data service. Arrangements for the submission of data, including commencement dates, will be managed through the Health and Social Care Information Service ROCR23 (Review of Central Returns) processes.
    As a minimum, the [national data] service will provide:
    1) a monthly benchmarking report to each NHS provider to show comparative prices paid for identical items against peer group and all other NHS providers;
    2) a quarterly spend file to each NHS provider re-presenting their own data, in a cleansed, classified and categorised format, for the NHS provider to undertake their own analysis of their spend, or for the NHS provider to share their data with other NHS providers and procurement partners such as procurement hubs, NHS Supply Chain and the Crown Commercial Service, or with external spend analysis providers and spend recovery providers;
    3) a twice yearly report to the Department of Health to show aggregated spend data across the NHS, together with trends on price movements by high volume, high value product lines and spend categories.
    The national data service will provide technical support to NHS providers to facilitate routine automated data extracts from NHS provider systems, including standard software plug-ins and online support. As well as the outputs described above, the national Spend Analysis and Price Benchmarking service will show progress on the elimination of unjustifiable price variations.
    [end of extract]

    So, here we are, half-way through 2015, and nothing – absolutely nothing – apart from the DH stating that trust-level data is still crap and that the organisation that they selected (which doesn’t even provide spend analysis services to any of its customers…) has failed after many months of trying. The DH could have run a competition to select a spend analysis partner in 2014 for NHS trusts, but didn’t. Well, it now transpires that it actually did run a competition for spend analysis services and it awarded a contract to Bravo. But this was just for the DH and its ALBs – it forgot to include the NHS in the spec. (Could the levels of incompetence actually get any lower.)

    We are lucky within our trust that we didn’t wait for the DH, and our reputation locally has been enhanced by the actions we have taken to demonstrate value (at a local level) by deploying our own solution. Our solution is identifying and subsequently helping us to pursue £Ms in savings.

    I would hate to imagine the scale of savings which have been lost by the almost lackadaisical approach of the DH eProcurement team. I have no idea why the NAO hasn’t intervened or even why the new replacement for Peter Coates looks like (EDITOR’S NOTE – HAVE DELETED NEXT SENTENCE IN THE INTERESTS OF GOOD MANNERS AND PHYSICAL IMPOSSIBILITY…)

    But I have observed that many of my peers and colleagues will also continue to (AS ABOVE), hoping that this latest farce will soon be forgotten and that they can return to their day jobs (to remove their heads from these holes only to scratch them in bewilderment). But we all know that there’s a storm coming – the new ‘national catalogue’ is the scalpel that will be used to carve up NHS procurement, and the DH will be there to stitch us all up all over again.

    And now another initiative has reared its head – the ‘demonstrators’. Six hospitals will be chosen to demonstrate, over the next two (three?) years, what good looks like to all other providers. (This is contained in the GS1 presentation above.) It has been intimated that the budget for this initiative is £12m – (if true) this is enough to purchase individual spend analytics services, for three years, for every acute provider in the NHS. Or an inventory management system for every acute provider for a similar period of time. Either of which would generate massive savings across the provider sector at a time when it is desperately needed. Who the hell dreamed up this idea? If you’re one of the lucky six, lucky you, but if not….then what?

    This is stupid beyond belief.

    The Carter report has been described as a pheonix from the ashes of the efficiency programme, but, given the lack of insight driving these latest initiatives, all I can see is another ostrich.

  4. Anonymous:

    The DH seem to have gone full circle on analytics and benchmarking ( remember the attempts of the past @UK and the NAO report and the Atlas of Variation), again reaching the conclusion that it can’t be done with Trust data ( or at least not by a DH led initiative). John Warrington’s speech at the GHX conference says it all ‘….the HL data confirms that there is no common way of analysing AP or PO data across trusts …’

    https://www.gs1uk.org/our-industries/news/2015/06/26/update-on-nhs-eprocurement-strategy

    Variable data was also cited by the Carter report as undermining any useful benchmarking analysis of the 22 trust cohort.

    The trouble is, that Bravo do in fact support a cohort which do use the data in this way.

    Their cohort is a representative sample of around 15-20% of NHS England which is a monthly refreshed dataset, the most up to date and deepest classificatied dataset of NHS spend that there is. They’ve also managed at scale massive public and private datasets on behalf of CCS and ironically provide analytics for the DH internal spend.

    Until this exercise many would have been surprised that HL did any spend analysis let alone could demonstrate competency.

    Bravo’s cohort contains several of the 22 trusts ( the work with HL has been unnecessary duplication for them). Bravo manage to not only work with these complex datasets but also do deep dive clinical supply chain and benchmarking analysis, monthly directorate reviews and clinical engagement based upon the analysis, all of which attracts very positive reviews from from not only procurement and finance stakeholders but also clinicians. So how do they manage to do it and others including the DH don’t ?

    It is baffling to me that they have not even been given the opportunity to get involved with the DH exercise and that any refresh of the DH cohort may very well continue with HL or even worse someone else with less demonstrable capability in this area.

    1. Secret Squirrel:

      Ah but you forget the key aspects here…..

      Healthlogistics have been peddling stuff like this for years. They pitched to me about 10 years ago for spend analytics which they were subbing off to a company called Etesius at the time, PGRX now.

      But more importantly, you forget Healthlogistics is run by people who used to work for GHX…….which takes you to nice conferences…..and is tied up in selling GS1 implementation services….with GS1 having being partnered with GHX since 2008…….

  5. Robert Pooley:

    I did find this story remarkable, and find it incredible that the DH continues to be just so disconnected from our real world here on the front line of NHS Procurement. Our Trust like those of some of my contemporaries is doing a lot to try and ensure we get good quality management and usage data. We too are increasingly worried about the DH procurement strategy and approach, and sad to say, I think the central procurement team have now completely lost the plot.
    The one good step has been the so called “mandatory requirement” for GS1, but I hear that few Trusts have even responded yet. That policy should have real teeth, and that’s for both Trusts and suppliers – so that there is real impetus to just get on with it. Coming from the grocery industry I can’t believe that GS1 hasn’t been adopted in health products yet.
    Ours (and our FD’s) view is that local inventory management (IM) linked with a proper implementation of GS1 has a great deal to offer, and you only have to look across at Portsmouth, Derby, Preston or others to see what can be achieved once you get good data. This people, product, place traceability brings huge patient safety benefits, but also has massively positive effects on understanding exactly what is used where, and can help address the stock mountain we all carry.. (even if we don’t want to say that publicly).
    Yes, for IM there is surely an investment to be made, but the audited ROI’s do show a great return. Unfortunately there are very few GS1 certified and workable IM systems to choose from that properly integrate with all the other systems we all use – although a clear leader with more successful implementations than the others is at last emerging.
    For fear of making exactly the same mistake as the DH team I won’t name that company here – but they’re really not difficult to find in the space. Strangely it is not the seemingly DH popular GHX who would appear to have a strong interest in trying to influence this sector.
    Hopefully the DH team will eventually wake up and smell the coffee, and help ensure a mechanism whereby individual Trusts can more easily invest in effective local IM to record usage and accelerate the GS1 program – and then everyone could simply push data to a common dataset.. but no, that would be sensible…

    For the record, I have no interest or involvement in the DH central team, any IM business or GS1. I do work in the NHS.

  6. Bill:

    “The supplier was selected as they had the most NHS Trusts from within the cohort of 22 using their spend analysis service”.

    Peter, when reading this response to your FOI, it only raised further questions. What did they mean by ‘selected’. Did they actually run a competition, or was it a single-tender action? How many trusts use their ‘spend analysis service’? I’ve looked on their website and this service isn’t even listed (see below) but they do lots of other, interesting (related) stuff – as you say.
    http://www.healthlogistics.co.uk/index.php/nhs-and-private-healthcare.html

    The GHX stuff is truly shocking. And stupid. And selfish. It’s one thing nipping up the road to deliver a presentation. It’s totally unacceptable being flown to another country to another continent to a plush hotel by a supplier who has a vested interest in your future work and commitments. I simply can’t believe that the DH Perm Sec thought that this would be acceptable.

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