Health Service Focus

31.08.17

Good procurement is the shared responsibility of all staff

As a new report this month points to the ‘huge differences in the amounts different trusts are paying for similar surgical products’, Peter Akid, director of procurement at NHS Shared Business Services, explains how the Getting It Right First Time report on general surgery mirrors a wider problem across all areas of the NHS.

It has been two years since Lord Carter first reported on operational productivity in our NHS hospitals. His interim report, which landed in summer 2015, began to shine a brighter light than ever before on examples of poor procurement. Deep-seated issues started to attract more widespread attention, such as the large and inconsistent variations in the prices paid for goods and services, ‘patchy’ data on product volume and price due to low levels of purchase order matching, and nurses being over-burdened with administrative duties in dealing with supplies issues.

In the years that have followed – during which time Lord Carter published his final report in February last year – what progress have we seen? The answer, somewhat unsurprisingly perhaps, given the fragmented nature of NHS procurement across the country, is a mixed bag.

If you were to rewind five years and ask the average size NHS trust how important procurement was to them, the response – in the majority of cases – would have been “not at all” when compared to other strategic priorities. What Lord Carter’s review achieved in the first instance was to raise the profile of procurement and its importance to the business success of all NHS organisations; defining ‘business’ here as delivering services to a pre-determined budget.

As things stand today, we see greater recognition from NHS finance directors and CEOs of how important it is to have a high level of purchase order cover, for example, or the significance of proper inventory management. Not done well and these are things that can mean massive amounts of money are lost.

But whilst some NHS hospitals have jumped to the top of the table when it comes to addressing some of the unwarranted variations Lord Carter was talking about, limited individual trust success doesn’t address the bigger picture of the health service as a whole.

For those of us working in shared services, this is where we need to convince more NHS trusts of the value of working together, by using a national model that can achieve the economies of scale Lord Carter was calling for.    

The gold standard, to which all parts of the NHS must aspire, is a seamless source-to-settle system that is commonplace in other industries. This represents the fundamental building blocks of good procurement, better financial control and better quality data.

It means anybody who spends money on behalf of the NHS should be able to go onto a system with a centralised catalogue, which takes the user to the preferred product – on the right contract at the right price – and turns the requisition into a purchase order (PO) to be sent to the preferred supplier. The supplier provides the product that is then goods receipted by the original user and all of the payment processes follow on behind.

The whole process should be simple to use and one which the user cannot get wrong – if you get it wrong you don’t get your product. This ensures that all the downstream systems operate without the need for rework or misunderstandings. Crucially, it means the organisation gets better quality data, improved quality spend management and much higher level of PO cover – that’s what good procurement looks like.      

To truly achieve the high standards of procurement that befits a modern 21st century healthcare system, there must be a strategic decision – taken at board level – to invest in any improvements needed to address a poor purchasing culture across an entire organisation. The huge NHS savings that are there to be made come from a recognition that good procurement is the shared responsibility of all staff across a trust. The answer is not to simply leave it at the door of the hospital’s – usually overworked and under-resourced – local procurement team.  

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