Genmed delivers vendor-neutral managed services

Solution adopted by two NHS trusts in Wirral and West Cheshire

Genmed is delivering a variety of vendor-neutral managed services for the Countess of Chester NHS Foundation Trust, Wirral University Teaching Hospital NHS Foundation Trust, and a shared medical microbiology service run by the two organisations which supports around 700,000 people in the area.

Launched in 2012, the Chester and Wirral Microbiology Service (CWMS) is a collaboration between the two trusts designed to improve patient care, enhance efficiency, yet cut operating costs in line with Lord Carter of Cole’s recommendations that pathology expenditure should reduce by between 10-20%.

With Genmed’s managed services eligible for 20% VAT recovery, we’re saving in total £173,418.86 across the three organisations after their management fee is taken into account

It is an addition to other areas the two trusts jointly partner on such as cervical screening and immunology services.

The organisations had a clear mandate to create a joint microbiology service given both had ageing laboratory buildings and the service in Wirral and West Cheshire was costing around £6.5m a year.

The old onsite facilities were shut, the staffing structure reviewed to achieve economies of scale, and a new laboratory was procured and located nearby in Bromborough, South Wirral.

This is saving about £700,000 a year on building costs and salaries.

The team then turned its attention to procurement benefits.

Genmed is administering a variety of managed services involving the following:

  • Wirral University Teaching Hospital [Arrowe Park Hospital] – the provision of equipment and consumables to support histopathology, cellular pathology, blood sciences and cervical screening
  • Countess of Chester Hospital – the provision of cellular pathology equipment and consumables to support the clinical service
  • Chester and Wirral Microbiology Service – the purchasing of a range of culture media and antibiotic reagents sourced from a number of suppliers, along with fully-integrated on-demand molecular diagnostic systems

To date, across all managed services, Genmed has sourced £1,238,706.19 worth of consumables and also associated equipment.

Andrew Bamber, pathology integration director for Wirral & West Cheshire, said: “With Genmed’s managed services eligible for 20% VAT recovery, we’re saving in total £173,418.86 across the three organisations after their management fee is taken into account.”

Genmed currently contracts separately with the Countess of Chester NHS Foundation Trust for managed services associated with its hospital and the CWMS, with Wirral University Teaching Hospital signing its own contract.

To simplify procurement, in time this will be consolidated so there is just one Genmed contract overarching the joint services.

Benefits of this approach include:

  • Easy engagement. Genmed’s services are authorised and available through the NHS London Procurement Partnership (LPP) Framework agreement which speeds up the whole procurement process
  • Neutrality. Genmed works with all suppliers and manufacturers and is not linked to any one vendor. This means equipment and consumables are sourced based on clinical relevance and are fit for purpose
  • Fixed price negotiation. As part of its engagement with third-party suppliers, where relevant, Genmed negotiates prices over time – typically two or three years - to maximise value, save money and aid financial planning
  • VAT recovery. Genmed managed services are compliant for VAT recovery under HMRC rules for contracted-out services
  • Benchmarking of prices. Working with over 40 trusts in the UK, it has a very clear view of what all organisations should be paying for equipment and consumables without breaking confidential agreements

Bamber said: “I want the best market price I can get in England.

Genmed’s focus is on supporting the clinical output and, through our reporting, improving the quality of the trust’s decision-making process

“Genmed’s independence gives me the reassurance that I am paying at the right level given its market knowledge.”

Commenting on the VAT recovery boost, he added: “I repeatedly hear people ask, particularly in finance, when will HMRC close the VAT loop hole?

“It’s a clear misunderstanding. It is something HMRC put in place themselves to develop the relationship between public services and the private sector. It’s certainly not a loophole. They encourage it and, after we’ve paid Genmed’s management fee, we get 14% net to invest back into services.”

Genmed has a flexible approach and its contracts do not ‘straightjacket’ trusts or the CWMS.

Bamber said: “I see managed services as a partnership and I feel we have this with Genmed.

“With our previous supplier, it certainly wasn’t the case. It wanted to tie us into using its own products, lacked the resources to manage and negotiate pricing with third parties, and couldn’t do the price benchmarking, which is hugely important - otherwise how do you really know you’re getting the best deal?”

Genmed has established an easy-to-use order system and manages the whole administrative process. This includes chasing suppliers if products are not shipped on time, driving down delivery costs, and even taking firms to task if they fail to meet expectations.

The creation of CWMS is also likely to be a building block for future developments in the region as pathology services in England are reviewed and consolidated into 29 hubs; an initiative currently being proposed and driven by NHS Improvement.

This is key as the workload in pathology is ever increasing - in the Wirral and West Cheshire area alone it is estimated that growth is 6% year on year.

Bamber said: “What I’m particularly pleased about is we’re getting better value and lower prices from suppliers through our Genmed managed service contracts, all with less management effort.”

Robin Modak, Genmed’s chief executive officer, added: “Genmed’s focus is on supporting the clinical output and, through our reporting, improving the quality of the trust’s decision-making process.

“A consequence of our presence is that we take on the administrative burdens, rationalise and standardise pricing, reduce costs, speed up purchasing and minimise administration associated with invoice processing and payments. It all boosts efficiency and ultimately hospital productivity because clinical people can focus on patient care.”

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