All NHS Trusts will be required to publish their spending data online to improve procurement efficiency, under a new strategy announced today.
It is one of the measures set out by health minister Dr Dan Poulter which aim to save the NHS an estimated £1.5 billion through improved procurement.
In a report entiled "Better Procurement, Better Value, Better Care," the Department of Health argues that data is the bedrock of effective procurement.
"[A]ccurate master data used consistently across the supply chain provides the foundation for procurement efficiency," it says
However, many Trusts do not have enough data about what they spend, it adds.
“High performing organisations have data covering over 90% of expenditure, across geographies and different business categories,” the report claims. “The majority of the NHS lags far behind this and is still not investing in systems and processes to improve the quality of their data."
It is hoped that by making spending data publicly available and sharing it across Trusts, areas of poor value for money will be exposed, buying patterns can be more clearly understood and supply requirements can be forecast more accurately.
In order to prepare its data for interoperability, the NHS will be creating a single data warehouse for all of its procurement data. It will standardise its data using the GS1 supply chain data standard, which defines a common coding language and classification guidelines across its e-Procurement systems.
A barcode system will also be set up to make it easier for Trusts to track and record all their purchases.
Also, a data visualisation tool will be provided to present procurement performance metrics to internal users, along with a new benchmarking system that will allow NHS Trusts to compare the prices are paying with their peers.
“Implementing the e-Procurement strategy, including the adoption of GS1, will enable trusts to share, compare and be transparent with their procurement information,” said the report. “This will not only help to hold public service to account, but will increase visibility of opportunities for SMEs, therefore supporting the economic recovery.”
Once data is standardised across all trusts, they will be required to publish and all procurement data, including opportunities, expenditure and contracts, on their websites or through the government's Contracts Finder website.
The NHS will publish its full ‘eProcurement strategy’ in September outlining the full details of its plans to improve data across national and local NHS infrastructure.
The strategy is based on the recommendations of a report published by management consultancy McKinsey & Company in October 2012. That report claimed that a 600-bed hospital could save £5 million simply by adopting the GS1 standard.
The NHS – the fourth largest employer in the world – has an annual budget of over £100 billion. Today's strategy could prove to be a goldmine for IT suppliers, especially the single procurement data warehouse project.
Improving comparisons
Improving the comparability of data within the public sector has been an explicit aim of Cabinet Office minister Francis Maude. "Comparability is the hand maiden of accountability", he said at an event last year.
However, the spending transparency tools provided by the government have not all supported this aim effectively.
Last week, the Cabinet Office published a new departmental spending portal called the Government Interrogating Spending Tool (GIST). Data visualisation guru Stephen Few told Information Age that the site is an "embarrassing mess".
"Data sensemaking consists primarily of making comparisons, but few comparisons are enabled by this system," Few said. "Items that you would want to compare must be viewed separately, such as spending and budget."
