Patient-Level Costing in the NHS

How supply chain optimisation can cut costs and improve patient care by Paul Jackson, General Manager UK & Ireland, Genesis Automation

Supply chain solutions are unlikely to capture the imagination of doctors and nurses on the front line of patient care. But there’s no question that best practice inventory management and procurement can have a dramatic impact on the efficiency and effectiveness of any healthcare ecosystem. In the UK, for example, market leaders like Genesis Automation are providing hospitals and healthcare providers with affordable, innovative solutions that cut costs, reduce waste and improve safety.

Genesis Automation has been a pivotal player in redefining the way supply chains function within healthcare – most notably through state of the art Patient Level Costing systems (PLICS).

PLICS were first introduced into the UK’s NHS in the mid-2000s as a way of tracking and analysing the cost of care for individual patients. The rationale for this was that there were numerous anomalies in the system, which meant that some surgeons and hospitals were performing procedures at a much higher cost than others – for no other reason than inefficient purchasing.

While the arrival of PLICS was a step in the right direction, supply chain failings continued to persist into the current decade, hitting the headlines in 2012 because of the PIP breast implant scandal. In this particular case, the problem was not so much about money but the fact that the health system had no way of tracing patients who had received faulty implants. But it highlighted the point that better co-ordination of the supply chain could deliver both patient safety and efficiencies.

Action taken with Scan4Safety

As a consequence, the UK government launched Scan4Safety, a £12m project to introduce barcoding into six NHS Trusts. Working with companies including Genesis Automation, the government’s aim was to see how it could help acute trusts track and trace medical supplies, from the point of receipt to the patient. When it was introduced, Scan4Safety was expected to deliver savings of £800 million over seven years. A year after tests began, that estimate was increased to £1 billion.

So what does Genesis Automation bring to the table? Well the starting point is that the company’s inventory  management systems were honed in the competitive automotive sector prior to being developed in conjunction with the NHS for the health sector. Today, Genesis’ stress-tested solutions make it possible to scan every item involved in patient care pathway including surgical equipment and implants, tissue, blood and equipment used  - from the moment the patient enters the hospital to when they leave. The Genesis system  can match every patient item up to individuals in the care team, so budget-holders can build an accurate picture of the precise cost of any procedure.

Fewer hours wasted

Attention to the supply chain means staff (e.g., nurses) waste fewer hours on searching for items, so they can spend more time with their patients, a potential surrogate marker of care quality Furthermore, the technical architecture that underlies Genesis Automation’s inventory management systems can be used to see how effective different equipment is. If a hospital knows that one type of hip implant wears out more easily than another it is able to improve patient outcomes and streamline its systems.

Not surprisingly, the success of patient-level costing has been seized on by the government, which has set NHS Trusts the target of being able to identify the costs of all procedures. In turn, NHS Trusts have also recognised the potential for savings brought by effective supply chain management. In 2017, Royal Free London NHS Foundation Trust selected Genesis Automation to provide it with integrated supply chain management technology to increase traceability of medical supplies. The result has been significant cost reductions, effective device recall execution and increased visibility into procedure costs.

NHS Trusts demonstrate savings

Others to have signed up Genesis Automation recently include Royal Liverpool and Broadgreen University Hospitals NHS Trust and Hull and East Yorkshire NHS Trust. In certain cases, it has been possible to directly assess the savings achieved. Another Genesis customer, Doncaster & Bassetlaw NHS Trust, saved £700,000 on Loan Kits over 12 months.

Endorsements for Genesis Automation come from various leading figures, including (1)Simon Walsh, director of procurement at Manchester University NHS Foundation Trust, a department that manages £525m of spend on goods, equipment, materials and services. Walsh says: “We have to identify efficiencies and savings to fund our services. We have always had a strong procurement function, but we see the partnership with Genesis Automation taking it to next step, by capturing information at point of usage and using it to improve efficiencies.”

Driving innovation

Attention to the supply chain doesn’t just save money – though that of course is of paramount importance to publicly-funded bodies like the UK’s NHS. It also drives innovation in patient care. Understanding costing enables the NHS to change prices and create tariffs that may encourage acute trusts to adopt new models of care or services. These changes can positively influence the choices available to patients.

While it’s easy to see how hospital administrators and time-pressured nurses might benefit from Genesis’ solutions, what of surgeons? How do they feel about being scrutinised in this way? Well the anecdotal feedback is that they are positive about it. Data-driven by nature, surgeons like to see how they are performing, knowing that an efficient health system will help alleviate the very real pressure on resources.

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