Health Service Procurement – Equipment Management to Control Spend
Posted on: 22/06/15
It has been said that despite the reform, the NHS’ procurement process still delivers poor value for money. The reform called for a drive in clinical standards and a curb in wasteful spending by improving the managerial oversight of the health service as a whole.
While there has been some improvements in getting control of spend and improving patient care by better managing treatment services, a bump has been formed in the procurement of high value medical equipment.
In 2007 the Department of Health delegated the responsibility for the procurement of high value capital equipment to individual Trusts. Each NHS Trust is given the responsibility for making its own assessment of patient demand, and purchasing specific pieces of equipment through the route of its choosing and operating that piece as they see fit. The responsibility of equipment purchasing and maintenance provides the Trusts with sufficient incentive to coordinate spending decisions and reduce costs.
The Department of Health gave the Trusts access to three principle routes for the procurement of high value equipment:
- Dealing directly with suppliers
- Using framework agreements that are managed by NHS Supply Chain
- Joining up with other Trusts to make collaborative purchasing agreements.
Framework agreements is regarded as the most efficient mechanism to purchase high value equipment but decentralisation has led to high value equipment procurement becoming fragmented and uncoordinated, which has ultimately lead to wasted resources and variable standards of service.
By centralising procurement process and improving co-ordination of purchases, the health service should be in a better place to take advantage of the collaborative buying power and economies of scale.
We have recently taken our fifth NHS client to provide a contract management system which will them help save time and money by improving data management around contracts that are in place with their supply chain.
We developed the base systems of our Accord: Contract management System to have an equipment management functionality for Hampshire Hospitals Foundation Trust. The equipment manager is currently working in conjunction with their maintenance contracts; at a glance the Trust is able to see how much spend is being made in excess of their maintenance contracts, which in turn allows them to see not only value for money but make an informed decision on the additional costs which outweigh the cost of a new piece of equipment.
The contract management systems we have provided over the last five years is allowing procurement, purchasing, materials managers and buyers carry out tasks more effectively as the centralised system provides a clear oversight of data and reports, which can be easily shared between departments to help control spend.
Health service procurement not only need to find control over spending but need to co-ordinate and find a process around equipment maintenance that will ultimately bring value for money and drive savings.