Advanced Computer Software : NHS trusts must improve inventory management and patient costing analysis to meet savings target, says Advanced

Published on: Tuesday 23rd September, 2014

NHS trusts should replace inefficient inventory management processes and improve patient level costing 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 (Advanced).

The DH has committed to generating efficiencies of £1.5 billion to £2 billion 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 £3 million and £5 million for a 600-bed hospital could be realised through better traceability of stock items and improved procurement performance*.

Dean Dickinson, Managing Director of Advanced Business Solutions (Public Sector & Enterprise Division), comments, "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 system. Spend analysis systems enable staff to instantly identify price variances, non-compliant ordering and unmatched invoices while monitoring supplier performance.

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 adds, "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 reinvested into improving frontline care."