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1 The business of care 1
2 The health market commissioners, providers choice, commerce and care Practices: Holder of contracts with provider and consortia Consortia: Co-ordinate healthcare development and acute contracting for practices manage risk pool Care Providers: Deliver care to tariff Manage input prices/costs Patients: Choice of practice & provider Reg Health Board: Award Primary Care contracts and assess performance and healthcare with ties to local authorities and public health Health Industry: Supply goods, medicines, equipment, staff And provide managed ser vices 2
3 With healthcare organisations facing structural change to align activities to meet healthcare business objectives and pressures. Challenges and opportunities balance out 3
4 CPS - translating these challenges into simple service offers to meet healthcare business objectives 4
5 Procurement and SBS CPS solutions focus on understanding the management of costs, and focus on care 5
6 The headlines.. In the new NHS of constrained budgets, trust chief executives sh ould consider procurement as a strategic priority. Given the scale of the pote ntial savings which the NHS is currently failing to capture, we believe it is important to find effective ways to hold trusts directly to account to Parliament for their procurem ent practices. NAO Report At least 10 per cent of hospitals spending on consumables, amounting to some 500 million a year, could be saved if trusts got together to buy products in a more collaborative way. Amyas Morse February
7 Back Office Efficiency Report Jim Easton January 2011 The evidence base for a shared service is overwhelming. It is critical that the NHS uses its scale to leverage greater efficiency. Evidence from the private sector, central government and the NHS has shown that adopting shared services can deliver both significant cost savings and service improvement. There is a fiscal imperative for NHS organisations to transform the way they work to deliver efficiency savings and high quality frontline services. By adopting shared services in greater numbers the NHS will be able to deliver savings without impacting on patient care. The NHS is paying a premium for its back office functions due to the fragmentation and lack of uniformity across the sector. 7
8 Efficiency Review Sir Philip Green October 2010 You could not be in business if you operated like this. It would be impossible Basic commodities are bought at significantly different prices across Government departments. Multiple contracts have been signed with some major suppliers by different departments at different prices. There is a huge opportunity that has been clearly identified both in central Government and beyond, but without a clear mandate, energy, focus and commitment, this cannot be delivered. 8
9 NAO Report key findings for NHS Trusts Limited access to purchasing data (produc ts/prices/providers) within NHS Trusts, demonstrating low levels of purchase and contract coverage Lack of commitment to collaboration Wide price variation on common produc ts Wide product variation with low levels of standardisation Large volume, low value, purchase orders increasing administration costs, reducing consolidation power Spot Buying only using commitment at single trust level tactical short term step that lacks a sustained strategic cost reduction methodology non compliant procurements significant financial risk to trusts from successful challenge award damages Model required to engage col laboratively with regional and national agencies Greater take up of eprocurement, ecatalogues, exchange market places and esourcing systems required alongside standard product c oding 9
10 The vision for managed spend 10
11 Procurement may have Strategies for sourcing that support healthcare business development With acknolwedgement to the Kearney chessboard 11
12 The SBS Commercial Procurement Solutions response: The business cycle driving our services 12
13 CPS Stepping down through M.I. Data and control points to manage costs, spend and drive savings 13
14 A model for engaging with national support, Linking strategic change with operational delivery Demand Si de Enablers Supply Side Enablers Specialty/Bespoke Sourcing Approach Common/Collaborative NHS Trust NHS Trust NHS Trust NHS SBS Trust Trust Spend Spend Analysis Analysis Standard Processes Price Price & Product Product benchmarking benchmarking Strategic Strategic Sourcing Sourcing & GS1 GS1 Product Product Market Market management management code code adoption adoption SAP SAP clinical clinical use use / / Electronic Electronic marketplace marketplace pathway pathway review review & ecatalogues ecatalogues Commitment Commitment Sid4Health Sid4Health supplier supplier contracting contracting accreditation accreditation Back Back office office outsourcing outsourcing Of Of finance finance / / accounts accounts / / purchasing purchasing Innovation and Learni ng NHS SC Logistics Logistics consolidation consolidation Volume Volume buy/supply buy/supply Materials Materials management management OGC Buying Solutions Pan Pan Govt. Govt. Supply Supply frameworks frameworks Health Industry Markets Health Industry Suppliers Pan Pan Govt. Suppliers 14
15 The SBS Commercial Procurement Solutions process aligned services 15
16 CPS Products and services for business challenges. 16
17 The SBS CPS s trategic sourcing `contracting offer 17
18 Strategy steps in increasing spend management Spend Under Management Benchmarks*: Laggards 30% - Industrial average 30-70% - Best in class 70% 18
19 Trust objectives 19
20 Aberdeen Group Global CPO Study Procurement key objectives 20
21 KPI s that underpin Trust business objectives and track the progress of procurement in optimising spend control 21
22 A move away from frameworks Spend refined, aggregated and commited over time All NHS expendi ture covered by Framework s/contracts 22
23 The SAP pathway The route to business performance and savings 23
24 SAP Process Analysis Product Phase 1 - Review Spend data - Benchmark Pricing Clinical Review -Share clinical expertise -Consider NICE guidance Procurement -Procure with commitment - Initial Standardisation Implementation and savings - Implement contractual outcome Project team; CPS, DOFS, SBS, Clinicians Supporting; Procurement, Business partners Pathway Phase 2 Pathway Efficiency Review -Review processes in pathway -Product use for patient/ task Product Validation -Developing exact specifications -Evidence based selection Deliverables -Efficiency, savings, innovation -Full Standardisation Selection of Strategic Partner -Drive product development -Deliver further efficiency and utilisation savings Project team; CPS, AQuA, NICE, MHRA, NPSA, Clinicians Supporting; Procurement, DOFS, Business Partners Innovation and Continuous improvement Phase 3 Pathway workstreams -Pathway Product workstreams -Patient Level Costing Product efficiency -Demand management - Right product for patient/ task Innovation and improvement -New product development -Implementation of innovative products Savings and benefits delivery -Establishment of ongoing KPI s and targets Project team; Clinicians, Strategic Suppliers, NICE Supporting; CPS, MHRA, NPSA, Business Partners 24
25 We will support securing supplies, procuring compliantly, and in optimising your spend volumes. We will ensure there are business ready catalogues for organisations to use in operational purchasing We will continue to move framework volumes, committed customers, and commercially responsive suppliers closer together through continuous SAP rounds. 25
26 CPS Data Flow and Map 26
27 Using spend analytics global views to look across markets and NHS organisations 27
28 Spend By Supplier The graph at the top left shows the top suppliers by invoice spend; blue bars are for invoice spend and red bars are for order spend. The graph at the top right shows the top suppliers by order spend. Again, blue bars are for invoice spend and red bars are for order spend. 28
29 Invoices By Supplier The invoices by supplier shows all the invoices a supplier sent. There is the functionality to enter a name of a supplier you wish to view which will search and return all the invoices from that supplier. 29
30 Products By Supplier The products by supplier shows the distinct products bought from the selected supplier. 30
31 Purchase Order Data The purchase order lines shows all of the purchase order lines for a chosen product 31
32 Spend by eclass This bubble chart is a kind of scatter plot. PO lines are grouped by eclass and represented by a bubble for each category. The diameter of the bubble is proportional to the number of purchase order lines. 32
33 Spend by eclass continued We can further drill into each bubble to obtain information on the next level of eclass, right down to level 3. 33
34 Products by eclass This shows all the products bought in a chosen eclass category. 34
35 Data Driven change Benchmarking prices and measuring markets 35
36 Data Driven change profiling each organisation 36
37 Data Driven change examining the use of contracts 37
38 Data Driven change using price variation to plan procurements 38
39 Data Driven change profiling each organisation 39
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