How the NHS's E-Procurement strategy could save £5M per Hospital

Although recent e-procurement strategies have estimated a potential £5 million savings per hospital in a recent NHS report, analysts are predicting that this new system could take time before becoming the new industry-wide standard. Before the Department of Health and the NHS can have this system up and fully-operational, a collective effort and several years of work would need to be given by the Department, before e-procurement could be achieved throughout all of the 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,” the report states, “It will take several years of concerted effort across the NHS landscape, and across the NHS supplier base, to achieve this ambition.”

For a 600 bed hospital, the report suggested that this new e-procurement strategy would produce an annual savings between £3 million and £5 million.

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”.

Within this strategy, adhering to PEPOL regulations, a European IT standard which allows suppliers to engage with the public, will become a mandatory requirement. Additionally, NHS providers will be required to submit monthly reports of accounts payable and all purchase order transactions to show benchmarking efforts towards comparable pricing by other providers in the network.

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

“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,” the report went on to say, “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.”

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 standardization across trusts.”