Standardised Procurement Could Save The NHS £5bn


June 12, 2015

Standardised Procurement Could Save The NHS £5bn

Simple steps and a better approach to purchasing ‘could save the NHS £5bn’ a review published yesterday has found.

After spending a year working with 22 hospitals, Lord Carter has found vast differences in the prices hospitals pay suppliers for essential items such as pills, dressings and laundry services. A more standardised approach to purchasing could lead to total savings reaching billions of pounds, the report claims.

At present, the NHS uses 500,000 different lines of everyday items with prices between similar goods varying by over 35% compared to 1% to 2% in other health systems. Nuffield Trust Chief Executive Nigel Edwards told the BBC ‘Lord Carter is right that there is waste within the health service and that enormous savings could be made through standardisation.”

This opinion is echoed by a leading Supplier Management Software provider to the Healthcare Sector, Trade Interchange. “We work with many healthcare providers including BMI, Four Seasons, HCA and Barchester, so we understand the procurement challenges faced within the sector,” said Simon Brake, Director at Trade Interchange. “Although on a smaller scale to the NHS, our Healthcare customers face similar hurdles, they are often spread across multiple geographic locations, buying a huge number of lines of products. They come to us to help standardise their procurement processes and ensure a consistent procurement strategy is being delivered across the organisation that ultimately will save considerable time and money.”

Brake continues “Our eRFX software allows for collaboration in tendering. Invaluable data can be captured in a standardised framework for users to evaluate and compare current and future suppliers in an easy and streamlined manner. eAuctions provide additional value and benefit, allowing organisations to leverage economies of scale through open and competitive online negotiations. Our eAuctions have helped companies achieve huge savings extending to £100,000’s on items including Swabs, Gloves, Procedure Packs, Medical Instruments and many more”

“Besides our ‘eSourcing’ modules, an increasing number of healthcare customers are adopting our Supplier Contract Manager (SCM) module. SCM provides organisations with a cloud-based centralised storage hub for properly negotiated contracts, that is visible to everyone and easily shared across the organisation. This helps reduce off-contract and maverick spending, and the workflow element creates a streamlined contracting process that enforces best practice.”

In conclusion, Jeremy Hunt, the health secretary, told the Financial Times that he was “determined hospitals should focus their resources on patient care by helping them ensure they aren’t paying over the odds for basic items”. 

“The NHS has huge purchasing power as the world’s single biggest buyer of healthcare products, so we should be driving for the best-value deals every time”

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