Secret to cutting costs lies in procurement know-how, industry leaders claim

NHS trusts must improve inventory management and patient costing analysis to meet savings target

Savings could be made through enhanced procurement methods, according to Advanced Business Solutions

NHS trusts should replace inefficient inventory management processes and improve patient-level cost reporting to achieve the Department of Health’s (DH) procurement efficiency savings target.

This is the advice from leading business applications and services provider, Advanced Business Solutions.

Finance departments and clinicians will only succeed if they have the right technologies in place to automate the processing of accurate and real-time procurement data

The DH has committed to generating efficiencies of £1.5billion to £2billion by 2015-16 in its latest eProcurement Strategy, which intends to help NHS trusts gain greater control over non-pay expenditure.

Potential savings of up to £8,000 per bed and between £3million and £5million for a 600-bed hospital could be realised through better traceability of stock items and improved procurement performance, the strategy claims.

Dean Dickinson, managing director of Advanced Business Solutions’ Public Sector & Enterprise Division, said: “While NHS trusts are making progress, some still have to achieve better value from their supply chain if the DH’s ambitious targets are to be realised. Key to this will be improving inventory management and visibility of spend in order to minimise unprofitable service lines and purchasing anomalies.

“Finance departments and clinicians will only succeed if they have the right technologies in place to automate the processing of accurate and real-time procurement data.”

Patient-level resource management (PRM) solutions, integrated into financial management systems, help to facilitate effective patient-level costing, resource analytics and stock management.

By replacing manual, paper-based processes, PRM systems ensure NHS trusts can glean real-time stock information and correctly forecast inventory requirements to achieve efficiencies by optimising usage, reducing stock holding and unnecessary waste.

PRM systems also provide instant costing and usage information on product lines. This ensures greater financial control over product requisitioning and enables clinicians to analyse the cost of all items used for surgery to improve the accuracy of patient costing.

NHS trusts should also consider implementing modern integrated spend analysis solutions into their finance systems, say Advanced. These enable staff to instantly identify price variances, non-compliant ordering and unmatched invoices while monitoring supplier performance.

PRM and spend analysis solutions can deliver hundreds of thousands of pounds in annual efficiency savings by replacing manual inventory management processes and providing a unified view of spend

Advanced’s reporting metrics also compare contract vs non-contract spend, category spend analysis and highlight differential prices for the same products or service to improve information visibility and purchasing decision making.

Dickinson said: “PRM and spend analysis solutions can deliver hundreds of thousands of pounds in annual efficiency savings by replacing manual inventory management processes and providing a unified view of spend. These solutions also assist NHS trusts to adopt a more-strategic approach to purchasing to keep costs under control and free up vital funds which can be re-invested into improving frontline care.”

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