May 19, 2014 Opinion piece
“The NHS wastes billions on procurement”; “This Trust buys the same gloves as that Trust but pays 7.5 times more”; “Public procurement is a shambles.”
This article first appeared on Health Business on 19th May 2014.
The recognition that ‘something needs to be done’ in relation to the way the NHS manages its annual £30bn of non-pay spend, including £20bn on goods and services, has been around for years.
Quite how this issue should be tackled has been, and continues to be, the subject of some debate but what is clear is that there is no more time for delay. The government is having to address difficult questions around how it will deal with the funding crisis facing the NHS and failure to evolve the way in which any area currently operates is no longer an option.
An approach to better purchasing
So why is the procurement function so important? Put simply, the NHS may possess the greatest purchasing power of any business in the UK, but the way in which it manages this process is vastly inefficient. It is estimated that trusts can save £1.5bn by the end of 2015-16 through taking a cohesive approach to procurement based on global standards, national infrastructure and local delivery. These savings will then free up money to be invested in front-line care.
Introducing this scale of change obviously brings challenges alongside it, but precedents exist in the global healthcare sector and the UK’s banking, manufacturing and retailing sectors through the way in which they have utilised technology solutions to revolutionise their business operations. All the developments discussed here have already been successfully implemented at least in part somewhere else.
In this article we explore how shared data solutions can enable trusts to drive efficiency in procurement and focus resource on the provision of high quality care to patients.
Procurement Programme
In August 2013 the Department for Health published Better Procurement, Better Value, Better Care – A procurement development programme for the NHS, which laid out four key initiatives to improve the procurement function of “every employee who influences purchasing decisions or spends money with suppliers.” This included a series of interventions to deliver immediate efficiency and productivity gains, and actions to improve data, information and transparency. It also involved an initiative to engage clinicians more fully in procurement decisions through clinical procurement review partnerships, and the creation of a new national ‘enabling function’ to support leadership and build better capability throughout the procurement system.
The strategy for delivering on these initiatives comprises taking in the best elements of existing technology and systems from a range of sectors and sources and crafting them into a practical system for Trusts to implement. The key elements of this system are outlined below.
NHS GS1 Datapool
Master data relating to the products and services the NHS procures represents the core of this strategy. Master data is loosely defined as all the information about a product necessary to perform business transactions (core attributes such as product description, dimensions, packaging levels, manufacturer’s address, minimum order volumes etc). A datapool is a central repository for this master data which is stored and accessed in a standardised way by suppliers and buyers. The use of a datapool ensures unequivocal identification of products and provides a synchronisation capability ensuring that buyers have up-to-date information at all times.
NHS PIM Solutions
There are a number of datapools around the world linked by what is known as the GDSN (Global Data Synchronisation Network) which operates in over 150 countries and includes product data for over 10 million items from over 25,000 producers. In order to ensure that Trusts’ product catalogues only contain the data they need, a system which interfaces with the datapool to ‘pull’ the required information is used. PIM (Product Information Management) solutions will be provided centrally by the Department for Health to enable good catalogue management by trusts.
NHS GLN Registry
While a datapool helps to unequivocally identify products and services (the ‘what’ of procurement), a GLN (Global Location Number) registry identifies the ‘where’. GLNs are a GS1 identifier used to uniquely identify legal entities, delivery and storage locations. A central registry of GLNs means that the physical location of where to deliver goods and the destination of all business messages (purchase orders, invoices, advance delivery notifications, proof of delivery, remittance advice etc.) is similarly unambiguous.
Purchase to Pay
The combination of accurate master data, good catalogue management and consistent location identification enables, through local systems, a fully integrated purchase-to-pay process with little human intervention.
Systems like these have been used for many years in retail environments and are estimated to save the UK retail industry some £11bn each year through error reduction, better stock availability, more accurate forecasting and a myriad of additional benefits derived from increased visibility.
Direct Patient Benefits
The general benefits that the retail industry experiences from the use of such automated technology often translates fairly directly into the healthcare environment, but the true value of improved care delivery and better outcomes for patients bears a little more analysis.
The procurement systems outlined above, when integrated into other systems, can deliver benefits far beyond the purely logistical and commercial. Considered in the light of correct patient identification, Electronic Health/Patient Records (EHR) and wider hospital systems the real impact on better care delivery becomes clearer.
Patient Identification
Parents often retain the wristband issued to their children when they were born. The light blue and pink bands featuring a midwife’s neat handwriting may provide a sentimental reminder of a happy event, but as the basis for a rigorous and unequivocal method of patient identification they are little use. Since October 2013 it has been a required standard (NHS ISB 1077) for NHS hospitals in England to issue patients with printed wristbands bearing basic demographic information, the NHS number, an optional hospital PAS number and to have this information coded into a GS1 DataMatrix barcode.
This identification wristband can be used as the key to accessing a patient’s EHR, to confirm identification before drugs are dispensed and to uniquely allocate instruments used for implants given to the patient, and is fundamental to enabling the wider benefits of automated procurement systems. In addition, the NPSA has for a long time recognised the safety benefits of consistent patient identification on the wristband and the positive impact this can have on a range of never events.
Electronic Health Records
Whether all hospitals will meet the target of becoming paperless by 2018 remains to be seen but, irrespective of the actual timescales for the removal of paper processes, the use of EHR will become ubiquitous over the coming period. The information which makes its way into these records and the way the record system interacts with other systems will be another key factor which supports the promised efficiencies of cost and safety enhancements.
In a recent presentation Judie Finesilver, eProcurement Pharmacist at the Commercial Medicines Unit, followed a patient though a simple admission, diagnosis, treatment and follow-up pathway and identified 33 touch-points along the journey where Auto-ID technology could enhance current processes. These ranged from automated completion of EHRs (in theatre, clinic and pharmacy) to verification of medicines and devices at the point of use (for authenticity, date validation etc.) to the automated replenishment of stocks used (direct to the manufacturer through aggregated systems pooling demand from a number of units to achieve best prices and volume discounts).
In addition, the amount of time saved through not having to look for patient notes and equipment can be drastically reduced (one estimate, from Bolton in 2011, puts this time-saving alone at one hour per eight-hour shift). Combine all these potential benefits with consequent improvements (such as in relation to product recalls, reduced cancellation of procedures due to lack of the correct equipment etc.) and it is not difficult to see how the management consultants at McKinsey estimated that, globally, adoption of GS1 standards in healthcare could save up to 43,000 lives, avert up to 1.4million disabilities and save up to $100bn.
What next?
Most hospitals in England have made some progress with the adoption of GS1 standards. Many patient identification systems, surgical instrument decontamination systems, robotic pharmacy systems and inventory management systems rely on GS1 standards (commonly without realising it). To fully implement the new procurement strategy each trust will be required to adopt a board-approved GS1 standards adoption plan. This plan will drive four main activities which can be started now:
Identification of people (patients and care-givers) using NHS ISB 1077; Identification of places (using GS1 GLNs); Identification of things (assets in the hospital and, through supplier engagement, products supplied to the hospital); and Integration of systems using GS1 as a global language.
Locations and people are the easiest places to start; supplier engagement is the best next step and integration of systems will come with consistency in upgrading and replacing existing systems.
Driving through these changes will pose some challenges but it should not prove costly if implemented properly, and will enable huge improvements to healthcare standards for all those involved in the provision of care in this country.
Chris Doyle, Industry Marketing Manager - Healthcare, GS1 UK