Sir David Nicholson has written this week to all NHS Trust CEOs, Foundation Trust CEOs , NHS Trust Board Chairs, Directors of Finance, and Procurement Directors saying (extracts) –
The NHS is a national success story. It is woven into the fabric of our society and is a public expression of our social values. At its best, the NHS is world class. But it can and must improve.
We must make the best possible use of the huge spending power the NHS has. The NHS must share data so that we can see the prices that different organisations are paying for the same goods and services, and it must do more to make collaborative procurement a reality. I want to see Trusts publish all tender and contract information for contracts over £10,000, and I want to see good procurement practice spread quickly and effectively – in particular the use of GS1 coding.
We have the potential to transform procurement in the NHS, enhancing quality and value. Our collective challenge is to work together to realise that potential. I have asked Sir Ian Carruthers OBE, Chief Executive of the NHS South of England to lead this work, which will start with an ‘Open Call’ for evidence to be published alongside NHS Procurement: Raising Our Game.
NAO and subsequent PAC made a number of recommendations to improve NHS procurement. They identified:
- A need for much greater transparency on prices being paid to suppliers by individual trusts
- A requirement for trusts and suppliers to adopt standard bar-coding (GS1), to improve procurement data and enable price comparisons whilst improving stock control and patient safety
- A need for trusts to make greater use of e-commerce systems to improve management information
Chief Executives want to be advised of the core technologies and systems required to support better procurement, including technologies to promote price transparency and comparison. They want to see standard coding systems (GS1), national databases for procurement including price comparison and product performance
Trust Chief Executives and their Boards are accountable for how their organisation spends public money, but it is rare they take the time to discuss whether they are securing value for money.
We want to support Boards in giving procurement a stronger focus. For example, Monitor is considering what could be built into the Audit Code, reporting regime and best practice standards allowing Boards to demonstrate they are securing value from their non-pay spend. In addition, the NHS Commissioning Board is considering how to encourage trusts to focus on their procurement, including possible use of CQUIN payments.
Underpinning e-procurement technology is the need for standard coding. Ministers have already stated that we are committed to GS1 as our preferred supply chain standard and the Department is working with industry sectors to urge them to adopt the standard. However, trusts need to ensure they make full use of the coding system by investing in technology such as bar-code readers and insist it is used by all suppliers. A reference guide to support trusts with this action can be accessed at http://healthcare.gs1uk.org/
Trust Chief Executives tell us they would like to see price and product comparison systems that allow them to benchmark prices and performance, but they are not sure where to invest. Trust Boards can easily play their part by working with GS1 to introduce standard coding of all products, making price comparison easier.
Action: Trusts should include the requirement for suppliers to provide GS1 GTINs (Global Trade Item Numbers) and associated data as an integral part of any procurement process. In addition trusts should make it clear to their suppliers that provision of GS1 data will be evaluated positively in any competitive situation and over time provision of the data will become a mandatory requirement.
These standards will enable trusts to assess their current position and enable them to plan their improvement. The Department will also explore ways in which trusts can obtain an inexpensive independent assessment of their position (a diagnostic) to create a baseline for improvement. In the longer term, we will work with the Chartered Institute of Purchasing and Supply (CIPS) and the Health Care Supply Association (HCSA) to develop an inexpensive and independent accreditation system for trusts to aspire to and demonstrate their improvement.
By December 2012, we will create a dashboard of indicators and measures to help trust Boards strengthen their accountability for procurement and to ensure the ability to report publicly
The ‘call for evidence’ will deliver a strategy that reaches further than the actions detailed in this document, but we believe the actions herein will raise the game for NHS procurement in the short term.