News / Common standards hold key to e-vision

Common data standards are critical if the benefits of using technology to procure goods and services are to be released, an HFMA round table on e-procurement was told last month.

The government has identified procurement as a key area for savings. November’s  Pre-Budget Report said better procurement along with back office efficiencies would play a big part in delivering the extra £5bn public service-wide savings demanded in 2010/11.

The HFMA round table on e-procurement, organised with the NHS Purchasing and Supply Agency and sponsored by software supplier Lawson, discussed how e-procurement could contribute to this agenda. It also identified the specific role for finance directors in adopting new technologies.

Rachel Hodson-Gibbons, head of procurement at PASA, said the vital first step was getting common data standards: – GTINs for products, NHS e-Class for classifying groups of products and Duns numbers for suppliers.

Adoption of the codes is NHS policy, although there is limited awareness of this requirement among the finance community and NHS boards. ‘Without this we won’t get the full benefits,’ she said. ‘We need to be able to talk to each other [using a common language].’

She acknowledged that getting the NHS, which has more than 400 trusts, foundation trusts and PCTs in England alone, and its suppliers to adopt common standards was a challenge. But it was essential to improving understanding of the business and unlocking efficiency. 

Ms Hodson-Gibbons cited cancer drug Bleomycin. The PASA database currently holds 130 descriptions of this drug. She said this meant the NHS had no idea of its collective demand for the product, limiting the potential for collaborative procurement savings.

She said the NHS needed to work together by demanding the use of GTINs, for instance, in terms and conditions with suppliers. ‘If we don’t operate jointly, we won’t get suppliers to move,’ she said.

Sue Jacques, finance director at County Durham and Darlington NHS FT, said use of e-procurement and a paperless system at the FT had led to direct annual cost reductions worth £157,000 – through staff savings. She said this was before cuts on product costs were factored in and compared to annual system costs of £49,000.

Aside from the financial benefits, delegates agreed that better governance and patient safety could make a compelling case for e-procurement. But they said boards were concerned about control. Finance directors needed a greater understanding of the technology and what they could do quickly to improve procurement and their readiness for an e-system.