Health Service Focus

Mixed messages on eProcurement support

NHE’s David Stevenson looks at the issue of compliance with the government’s eProcurement Strategy and what support is being provided from the Department of Health.

To comply with the government’s eProcurement Strategy, NHS acute trusts (FT and non-FT) must, during 2014-15, develop and begin implementing a trust board-approved GS1 and PEPPOL adoption plan.

The 32-page document, covered in-depth in the May/June edition of NHE, notes that “detailed guidance” will be published for NHS providers, including compliance dates, along with templates to support the local production of adoption plans and business cases.

Since the launch of the Strategy in May, NHE has contacted numerous NHS acute trusts to assess what support has been received. The response: mixed.

Respondent views ranged from having “no help at all” to “we are working with the DH to understand the implications for our trust and to develop a coordinated approach”.

‘Left to get on with it’

A procurement director from a large trust in the West Midlands, who asked to remain anonymous, told us: “I think the DH is working very closely with a few hand-picked organisations – that is my impression of it. There is a group where it is testing some models out, but the rest of us are being left to get on with it ourselves.

“That isn’t a problem for my trust because we’ve invested heavily in eProcurement technology for a number of years and we’ve got a very good system in place that ticks all the right boxes. The last part of our jigsaw is the GS1-compliant ‘point of view’ stock control system, for which we’ve got internal approval and have driven the business case – but with no help from the centre.

“We’re the second biggest user of GHX, a pretty robust data exchange and data storage system, in the English NHS. De facto, we will be PEPPOL-compliant, but at the end of the day Steve Graham, [the DH lead on NHS eProcurement policy], has got to come out with something that actually is founded in reality – not this blue-skies stuff that he talks about at conferences.

“As I look across my patch, we’re ahead of the game. When I look around, though, there are trusts still using paper acquisitions; we lost paper seven years ago. But these need help and support from the centre.”

Workshops

Nicola Atack, technology team project manager at the London Procurement Partnership (LPP), who is responsible for supporting members to meet the requirements of the eProcurement Strategy, told NHE: “LPP representatives have attended two workshops for procurement intermediary organisations, enabling us to meet with the national eProcurement Strategy team.”

The purpose of the workshops was to ensure LPP’s strategies and plans were aligned – or to work out how to address any misalignments. It was also to agree how intermediaries could best work with their member trusts to drive the national strategy forward, together with identifying the national support needed for both intermediaries and trusts. 

In September, LPP also held an informative workshop for its members on GS1 standards and implementation of the eProcurement Strategy, which included presentations from GS1 UK and the DH.

However, Atack noted that its members are still “waiting for the DH guidance documents and templates”, to ensure that any plans they create follow the correct format and cover all salient areas.

She stated that each member organisation is in a different starting position when approaching the development of their plan. 

In terms of the procurement elements, some have very advanced inventory management systems in place and already use document exchange and eInvoicing solutions. For these organisations, their adoption plans will focus on making minor changes to their embedded supply chain processes that will enable the additional benefits that come from GS1 compliance, “once the supplier base is in a position to move forward”. 

But other organisations will need to consider significant investment and process redesign in order to begin GS1 and PEPPOL adoption, added Atack.

Compliance certification

To enable NHS providers to demonstrate progress in becoming compliant, the DH said it will develop a certification scheme for NHS providers and their suppliers, and a framework agreement will be put in place with external accreditation organisations to provide certification services.

Certification will be at the levels of: GS1 ready; GS1 implementing; and GS1 compliant, while progress against the adoption of PEPPOL will be monitored through the reporting of transaction volumes exchanged by access point providers.

The department added that NHS providers should include arrangements for the introduction of the PEPPOL messaging standards as part of their GS1 and PEPPOL adoption plan, including provision for the early adoption of PEPPOL compliant invoice messaging within pharmacy – to realise early benefits from electronic invoicing.

It was also stated that “in 2014, DH will establish a national framework agreement for the provision of PEPPOL-compliant access points”.

In response to the PEPPOL plans, the West Midlands procurement director said: “Steve Graham: let’s see your national strategy for PEPPOL, let’s see how you’re engaging with all the suppliers, let’s see your data warehousing strategy and let’s see funding from Dr Dan [Poulter].”

Achieving compliance

Speaking to NHE, Ali Ali, head of procurement at Bradford Teaching Hospitals NHS Foundation Trust (BTHFT), said that the trust’s executives have fully taken on board the points raised in the eProcurement Strategy and promised to make available, subject to a business case, the funds required to implement the systems required to achieve compliance.

However, at the moment, Ali was not 100% sure what the changes will mean for the trust’s procurement department.

“We were promised by the NOE-CPC (North of England Commercial Procurement Collaborative) a more elaborative explanation document detailing what it means to achieve compliance,” he said.

Currently, the trust has in place the Oracle finance system; 100% electronic requisitions; and 80% catalogue utilisation via GHX. Despite this, it is now exploring e-material management systems that will allow full compliance.

Ali said: “Powergate is one of these options and it was named in the eProcurement Strategy. The other option is with a supplier, which is accredited by GS1. So we are hoping that these options, in addition to what is currently in place – i.e. Oracle and GHX – will make sure BTHFT is compliant.”

He also believes that the eProcurement Strategy plans are deliverable but that is because the trust has “reasonable foundations”, and the DH has endorsed its “required actions” in principal to get it to the expected outcome: compliant.

Supplier concerns

Ali and Atack did, however, raise concerns with regards to suppliers. In particular BTHFT is worried that suppliers might not be able to comply with the requirements.

Atack stated that while the potential benefits of implementing GS1 and PEPPOL standards across the NHS are substantial, significant capital investment and process redesign will need to be implemented not only within NHS trusts but also by suppliers to the NHS.

“The DH has suggested that it could be 10 years before the whole vision of the eProcurement Strategy is in place and this gives some indication of the scale of the task,” she said. “Even before this time, however, small changes in line with the Strategy will deliver big improvements to the efficient running of many NHS organisations.”

Lucie Jaggar, head of procurement at East Sussex Healthcare Trust, told NHE that she couldn’t go into detail on the trust’s eProcurement plans, but did say: “We are working with fellow peer trusts in the south east and also with the DH to understand the implications for our trust and to develop a coordinated approach to delivery of the requirements over the next 12 months.”

Fragmented

The director from the West Midlands said that the NHS procurement landscape is “fragmented” and “diffused”, and the DH is not addressing the leadership issues.

“We’ve got Lord Carter of Coles as the de facto procurement champion (more on p24), but actually it is about the practical reality about how that then filters down onto a regional basis,” he said.

“I think the DH is missing a trick on how they bring a region together and develop some commonality of standards and processes; after all, that is what the Strategy is all about really.”

Lord Carter told NHE that he believes the Shelford Group highlights how collaborative buying can deliver savings.

But the director we talked to said: “If they’re going to nail the colours to the Shelford Group [mast] as the way to drive efficiency across the whole system then they’re backing the wrong horse in my opinion. Just because a trust is in the Shelford Group doesn’t mean its procurement is any good at all.”

He did state, however, that getting a trust’s e-commerce system functioning and in place can help underpin an organisation’s financial health.

Chris Slater, head of procurement at Leeds Teaching Hospital NHS Trust, interviewed on the next page, told us: “We’ve had very little support.” But he said DH procurement officials had recently visited the trust. “They walked away very impressed with what they’d seen, and they hadn’t seen that level of integration between inventory, Oracle, patients, RFID cabinets and catalogue management in one place.”

As someone originally from a sector outside the NHS “where stock management was all-important”, he was surprised that in the health service, “stock and inventory and supply chain is almost forgotten about, initially”.

His trust’s pioneering work over recent years has been mostly self-directed. “It’s something we’ve had to do on our own. Clearly we’ve got a vision: but we’ve very much got on and done it ourselves, so we’ve had no financial support from the centre, and no strategic support, if truth be known.

“They’re obviously waking up to the fact that the ability to get lower cost through negotiation of prices has pretty much had its day, and they’re having to look at other areas as to value within the NHS procurement landscape.”

Slater suggested the closure of the NHS Purchasing and Supply Agency (PASA) in 2010 made things worse.

“When PASA was dissolved, unfortunately the DH completely dropped e-enablement. We could have been where we are now four or five years ago, if they’d continued with some level of support – but it got dropped and fell between the cracks. Only more latterly are they starting to pick it up again.”

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