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Trusts must publish top 100 buys monthly to save £1bn a year

From April, trusts will have to publish their receipts on a monthly basis for the top 100 items bought by the health service, such as bandages, needles and rubber gloves, Lord Carter has said.

The requirement in his final and much-awaited report was designed in an effort to drive down prices and wild variation in what different trusts pay for the same products.

As well as greatly increasing transparency in the acute sector, the move is expected to save around £1bn a year by 2020-21, a considerable share of Lord Carter’s £5bn efficiency savings plan. By April 2018, Lord Carter hopes to see an overall reduction of at least 10% in non-pay cost delivered across the NHS.

But these 100 items will be just the start. Throughout the rest of this year, the new ‘purchasing price index’ will develop with more products added and reporting monthly.

The index will have three separate sub-indices focused on common goods, clinical consumables and high-cost medical devices.

NHS Improvement will be tasked with holding trusts to account on their performance against the index from April.

Within the next one or two years, Lord Carter’s team would like this index to develop into a national analytics and reporting system so that trusts can have full insight into what they buy, how much they buy and what they pay for goods, as well as how this compares with other acute providers.

“For the first time this will provide the NHS with a single national reporting system on purchase prices,” the report said.

Although trusts will only be held accountable two months from now, Lord Carter said they must collaborate with each other and with the wider supply chain immediately.

Across the whole procurement pathway, trusts must develop ‘Procurement Transformation Programme’ plans at a local level, with each trust board nominating a director to work with their procurement lead to implement necessary changes.

This will be overseen by NHS Improvement and done in collaboration with professional colleagues locally, regionally and nationally.

NHS Improvement will also have to provide a national spend analysis and benchmarking solution from high quality trust spend data, to be fully operational by April 2017 – including the purchasing price index.

All trusts will have to prioritise the role of procurement overall, ensuring effective system control and compliance and building supply chain capability (both in terms of inventory management systems and people). They will all have to build contract management capability to engage with industry more effectively, as well as work in collaboration with national procurement strategies and other trusts to explore common systems.

Examples of common systems include efficient electronic catalogues using retail system standards, enhancing current purchase to pay systems, and adopting the already mandatory GS1 and PEPPOL standards.