NHS e-procurement strategy could save £5 million per hospital

Will Green is news editor of Supply Management
8 May 2014

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8 March 2014 | Will Green

Introducing e-procurement across the NHS has the potential to produce annual savings of up to £5 million per hospital, according to a newly unveiled strategy.

However, the Department of Health (DH) report, entitled NHS e-Procurement Strategy, cautioned it would take “several years of concerted effort” to achieve e-procurement across all NHS transactions.

“The ambition of this strategy is for all NHS purchase-to-pay transactions and all category management activities to be undertaken by electronic means to cover all non-pay expenditure,” said the report.

“It will take several years of concerted effort across the NHS landscape, and across the NHS supplier base, to achieve this ambition.”

The report said adopting e-procurement would produce annual savings of between £3 million and £5 million for a 600-bed hospital.

Under the strategy, the adoption of barcoding of products and PEPPOL, a European IT standard that allows suppliers to interact with the public sector, will be mandatory for both NHS providers and suppliers through conditions of contract.

NHS providers will also be required to submit a monthly report of all accounts payable and purchase order transactions, and in return the DH will send out benchmarking reports to show comparative prices paid for identical items by other providers.

A central IT system will be established to support the strategy, which will be “interoperable with existing and future local e-procurement systems so trusts can locally select their preferred technology partners”.

The report said: “Frontline clinical care cannot be delivered to patients without the goods and services provided by internal support departments and external suppliers. Patient care is directly affected, either positively or negatively, by the success or failure of the procurement processes that place goods and services at the disposal of clinical staff.

“As well as contributing to improved patient care, wider use of e-procurement solutions driven by global standards will generate significant financial savings for NHS providers, achieved through reduced errors, reduced obsolescence and increased productivity.”

Dr Dan Poulter, parliamentary under secretary of state for health, said in a foreword to the report: “There have been many previous initiatives to realise procurement efficiencies but this time we mean business and are determined to deliver efficiencies to free up more money for frontline care.”

David Rabjohns, e-commerce enterprise architect at NHS Supply Chain, said: “This strategy will allow transparency throughout the NHS procurement process, simplifying the supply chain, driving cost efficiencies, increasing accuracy and allowing greater compliance. It will also enable a more unified system of procurement across the NHS, enabling product comparison, aggregation and standardisation across trusts.”

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