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Driving Value; Working Together
Abertawe Bro Morgannwg University Health Board
Mark Ramsey, Lynne Hamilton, Navjot Kalra
Finance for the Future
16th October 2018
Question:
How you do work together and drive value?
Answer:
Value is achieved from reducing waste, harm and
variation.
Hywel Dda – Our Big NHS Change
The types of variation: W
arr
ante
d v
ari
ati
on
• Local needs and priorities shape services
• Innovative approaches are helpful
• NHS is not monolithic
Unw
arr
ante
d v
ari
ati
on
• Clinical practice can be different across areas
• Patient Outcomes may vary.
• Costs for similar items also range widely.
Why does unwarranted variation matter?
NHS UK serves a million patients
every 36 hours.
NHS UK spends over £120 billion
annually.
Lord Carter’s report from February
2016 highlighted the opportunity to
save up to £5bn if unwarranted
variation can be tackled.
The inverse care law
The availability of good medical care tends to vary inversely with the need for it in the population served. This ... operates more completely where medical care is most exposed to market forces, and less so where such exposure is reduced.
“To the extent that health care becomes a commodity it becomes distributed just like champagne. That is rich people gets lots of it. Poor people don’t get any of it.”
Julian Tudor Hart
The challenge in the healthcare sector
Population(2013)=520K
Projected Increase (2016-2036)=8.1%
Over 85 ‘s More than double by 2036
Inequalities- 10.4 year life expectancy difference for males between least deprived and most deprived areas in ABMU
Inequalities- 7.3 year life expectancy difference for females between least deprived and most deprived areas in ABMU
Population Profile – ABMU
The constant Quality vs Cost debate
Financial turnaround
Opportunities in Procurement
Establish a brand: QVC= Quality, Value, Cost
Non-pay spend on clinical spend = QVC Tier 1
Non-pay spend on non-clinical spend = QVC Tier 2
Business TransformationPeople
• Operational Teams
• Clinicians
• Nursing
• Finance
• IT/Informatics
• Suppliers
• Procurement services
Pro
cess • Stock
Management Process
• Bed Hire
• Lean Management
• Risk management
• No-PO- No Pay
Technolo
gy
• Automated Stock Management systems
• GS1 Compliance
• Asset Tracking
Data
Lit
era
cy
• Financial Intelligence
• Purchase Order Data
• Visual Analytics
• Benchmarking –PPIB
19Non Pay / Consumables Savings £4.5m
Prerequisites and Principles for Value
through Procurement
• Establish “clinically acceptable” products with clinical teams.
• Should be applicable for >80% of cases
• Ignore niche indications
• Use the Procurement dashboard (Visual Analytics/BI) to review
information and spend.
• Encourage standardisation.
• Work with Procurement to obtain “best value” from supplier.
• Repeat exercise several times.
• Price determines volume (Not vice versa)
Understanding our spend split by suppliers
Supplier 2017 -18 PO Expenditure
NHS SUPPLY CHAIN £3,825,098.35
MEDTRONIC LTD £3,457,471.41
JOHNSON & JOHNSON MEDICAL LTD £3,169,456.34
FRESENIUS MEDICAL CARE RENAL SERVICES LTD £2,296,869.47
ABBOTT MEDICAL UK LTD £1,989,642.25
ROCHE DIAGNOSTICS LTD £1,846,305.90
BOSTON SCIENTIFIC LTD £1,471,510.17
STRYKER UK LTD £1,394,994.93
ONTEX HEALTHCARE UK LTD £1,115,134.02
EDWARDS LIFESCIENCES LTD £1,037,253.00
Subtotal £21,603,735.84
All Other Suppliers £28,588,406.08
Grand Total £50,192,141.92
Understanding our spend and trends with suppliers
Aortic Valves- Benchmarking
Identifying opportunities for savings based
Evidence Review and Benchmarking
Category Grand Total
GENERAL MEDICAL SURGICAL EQUIPMENT £3,592,274
MEDICAL EQUIPMENT SPARES £2,834,990
HEART VALVE ANNULOPLASTY PERICARDIAL £1,783,714
LAPAROSCOPIC CONSUMABLES £1,721,472
IMPLANTABLE CARDIAC DEFIBRILLATORS £1,607,510
BIOCHEMISTRY £1,386,191
JOINT REPLACEMENT HIPS £1,339,979
ORTHOPAEDIC TRAUMA PRODUCTS £1,325,220
ENDOSCOPIC EQUIPMENT £1,043,745
JOINT REPLACEMENT KNEES £1,041,115
“Heart Valve Annuloplasty Pericardial”
In simple terms: Heart Valves ☺
Heart valves – Suppliers
The challenge:
The stock management processes in ABMU are manual. This results in over-stocking and waste.
£2.2M worth of stock in 2017/2018.
5 stock turns vs 14 based on NHS Supply chain standards.
44 Theatres and Anaesthetic rooms across four sites.
1000’s of low-, mid-, & high-value medical consumables.
Inefficient use of staff and resources and sub-optimal use of supply chain.
The proposed solution:
“State of the art” inventory management
solution that blends closed cabinet systems and
open systems to offer the ideal solution for
stock management and patient costing.
All high value stock is controlled in secure
automated cabinet systems.
Only authorised members of staff can access
what they need, when they need it.
Lot traceability provides full visibility of
implantable devices.
Reduction in unwarranted variation.
Business TransformationPeople
Pro
cess
Technolo
gy
Data
Lit
era
cy
Transform and Save
Working together to reduce variation and
create value.
Lead from the back and let
others believe they are in front
➢ Mandela loved to reminisce about his
boyhood and his lazy afternoons herding
cattle. "You know," he would say, "you
can only lead them from behind."
➢ The trick of leadership is allowing
yourself to be led too. "It is wise," he
said, "to persuade people to do things
and make them think it was their own
idea."