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It’s no secret that the health service is under huge financial pressure. With the King’s Fund predicting an end of year deficit of more than £800 million for NHS trusts and foundation trusts – if the NHS was a patient it would not have a healthy outlook.
Often overlooked, procurement is an area that commands high spend and still has huge savings potential. As Jeremy Hunt, Secretary of State for Health, said last November in a speech to the King’s Fund: “The NHS spends almost £15 billion each year on medical equipment, devices, office supplies and facilities.” With this scale of spend this is an area where solutions have to be put in place to reduce cost. The Department of Health Procurement Efficiency Programme, led by Lord Patrick Carter, aims to do just that by delivering savings of at least £1.5 billion from the NHS procurement budget next year.
Carter’s Hospital productivity report, which was released in June, talks of the scope of savings that can be made with a better approach to purchasing. The report, which focused on 22 hospitals, found that the NHS could save up to £5 billion every year by 2020 by making better use of staff, using medicines more effectively and getting better value from the huge number of products it buys.
Spending pennies wisely
Jeremy Hunt is calling on the NHS to ensure every penny is spent in the most effective way for patients to improve standards of care while reducing costs. NHS Supply Chain is working hard to help trusts maximise their procurement budgets. As David Pierpoint, managing director of customer engagement at NHS Supply Chain explains: “We are committed to reducing our pricing on clinical consumables by 10 per cent and are on track to deliver £150 million of cash releasing savings by March 2016.” These are not small numbers and every trust can have a role in attaining savings and plugging the deficit gap.
David Pierpoint continues: “With over £81 million of these savings delivered, our journey doesn’t end here. NHS Supply Chain has with the Department of Health written to all our suppliers to notify them that we will not be accepting price increases and will continue to identify ways in which we can generate savings. But we have to work together to deliver this.”
To support the delivery of savings NHS Supply Chain is working closely with procurement and clinical teams in NHS trusts to identify where and how savings can be made. David concludes: “This approach will only work if trusts contribute towards this.”
NHS Supply Chain’s ‘Small changes big differences’ campaign jointly run with the Royal College of Nursing (RCN) and the Clinical Procurement Specialist network has highlighted the importance of engaging clinical staff in the procurement process. Dr Peter Carter, chief executive and general secretary of the RCN says: “Procurement is an issue often raised by nurses who are appalled by the waste and inefficiency they sometimes witness. We estimate that nurses working together with procurement managers could save more than £30m per annum – the equivalent of 1,000 nursing jobs – just by streamlining the purchasing of basics such as wipes and incontinence products.”
A recent Nursing Times survey of over 850 nurses showed a real desire from nursing staff to get involved in procurement with over 80 per cent of respondents recognising the scope to save money in their trust. A further 86 per cent believe that patient safety would be improved if nurses had greater involvement in purchasing. And the study went further with 54 per cent of nurses identifying areas where savings could be made by changing the clinical products used - the top five products being: Dressings (75 per cent), Gloves (65 per cent), Disposable Wipes (64 per cent), Incontinence Products (53 per cent) an Syringes (48 per cent).
Mandie Sunderland, member of the NHS Supply Chain Customer Board and director of nursing and midwifery at Nottingham University Hospitals NHS Trust played a key role in the campaign focusing on increased patient safety as well as more cost-effective treatment. Mandie said: “There has never been a better time to look at what nurses are buying and find those opportunities to save money, which will at the same time help protect patient safety and reduce the amount of waste in medical products. As the individuals at the heart of this process, we as nurses are in the best possible position to influence it.”
The NHS Core List and Compare and Save are two programmes with clinical engagement which enable trusts to make substantial savings.
Compare and Save
In April, NHS Supply Chain re-launched their Compare and Save programme. Following customer feedback NHS Supply Chain has concentrated on four key areas for 2015 where by moving to comparable lower cost products, or making efficiencies to the way trusts currently buy the products, trusts can make significant savings. The four areas are: dressings and wound care, haemostats, paper, ink and toners and wipes.
The key part of this programme is its personalised approach. Trusts can have data on these four key areas that details their story and its realistic potential to drive efficiencies and savings. All the products have been reviewed by the Clinical Procurement Specialists Network and could offer substantial national savings to the NHS. Since NHS Supply Chain first introduced the Compare and Save programme back in 2013 they have supported trusts to save £7,968,822 and in the first quarter of 2015, NHS trusts saved £1,727,961.
Over 200 trusts have already taken advantage of this programme and are seeing savings. Of course procurement changes not only bring monetary advantages, they can also address safety concerns too. Enabling the standardisation of product ranges that support clinicians and nurses to provide the appropriate level of care in each setting involves prioritising safety and being cost effective.
As part of the recently launched ‘small changes, big differences’ campaign NHS Supply Chain recently worked with Alison Hopkins, chief executive of Accelerate CIC to revisit her key learnings from the project to put in place an off-prescription community dressings solution, and to learn more about how, two years on, they are still working to 2010 budgets.
In 2009 Alison Hopkins, who was at the time lead nurse for the Wound and Lymphoedema Service, was well aware of the difficulties of the prescription route for dressings. The key challenge was the delays which are part of the prescription route – leading to frustrated clinicians and poor patient care, and wasted dressings piling up in patients’ homes. There was no standard practice across the area as prescriptions were written based on a wide choice of dressings.
A business case was developed which outlined a new off prescription route for dressings and it was presented to Practice Based Commissioning to be evaluated for budget allocation. A project team was put together including representatives from key stakeholder groups, commissioning pharmacy, procurement and NHS Supply Chain. The proposal was for a centralised scheme for community nurses, GP practices and nursing homes and 90 per cent of products were taken off prescription.
Alison Hopkins said: “Having a new scheme that changes the system means that some patients become visible.” It’s been very good to develop this scheme but it can’t just happen. Primarily it has to be a process that everyone buys into and that’s about an attitude change, it’s not just about procurement. We’ve never had to go cheap and cheerful you just have to have a better system and you have to have a system that supports clinicians to make good clinical decisions. There are two bottom lines for me: one is that the patients have been found [and are visible], and secondly that we’ve been able to demonstrate savings of £600,000 over the last five years.”
The NHS Core List
The Core List, developed by the Department of Health in partnership with NHS Supply Chain, aims to achieve best value by reducing the range of like-for-like products that the NHS purchases. This allows the NHS to commit to larger volumes of a smaller range of products which in turn allows suppliers to provide improved prices to the NHS as greater economies of scale in manufacturing can be achieved.
Greater competition on price is also being created, as only products that achieve the best value are included in the Core List. For procurement professionals it provides the most straight-forward option for driving out costs when purchasing everyday hospital goods and services, to potentially make more money available for frontline services.
All the products have been reviewed by the Clinical Procurement Specialists Network and could offer substantial national savings to the NHS. Following the successful introduction of NHS Supply Chain’s Desk Top Stationery Core Range, which has delivered savings of £432,000 for trusts in its first two months, significant savings opportunities have now been generated on examination gloves (save up to 23 per cent), patient dry wipes (save up to 16 per cent) and underpads (save up to 10 per cent).
The £81m cash releasing savings fund for the NHS, could fund 2,400 band 6 nurses; 535,700 outpatient attendances; 740,000 A&E attendances; and 333,000 overnight stays in hospital.