We need IT to stop NHS flushing away cash - ex-Health Sec

Dorrell wants better use of tech to save billions

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When the Audit Commission published its review of England's NHS this summer and warned of growing financial pressures, trusts already knew that achieving savings equivalent to about 5 per cent of their budgets each year until 2015 meant doing things differently and more efficiently.

Stephen Dorrell, the chair of the health select committee and former health secretary, believes making better use of IT is key to eliminating inefficiencies in the NHS, but that the opportunities offered by new technology are largely unrealised.

But Leeds Teaching Hospitals NHS Trust's use of IT to modernise its purchasing and stock control and achieve savings could offer one way forward for other trusts.

Over the past 10 years the trust has implemented a computerised inventory management system, and introduced GS1 UK standards, a set of identification numbers for products, suppliers, locations, services, assets and logistics units.

"One of the things that we found when we first rolled it out 10 years ago is that by using manufacturers bar codes, you expect to have one bar code for one product, says Graham Medwell, e-business manager at the trust.

"When we actually came down to look at it, there are many bar codes for the same product. This is why we put a lot of time and effort into encouraging people to use the GS1 standards, because you need a unique identifier for a particular product."

Over the past 10 years the system, which operates along similar lines to systems available in major supermarkets, has been rolled out to departments with a stock value greater than £250,000.

Stock staff post orders directly into the suppliers' system, a global healthcare exchange known as GHXS.Nexus, and order acknowledgments are posted back into the trust's IT system.

Living off the fat of the land

Medwell says that the trauma, spinal and neurology theatres at Leeds General Infirmary saved £500,000 over three years by cutting the purchase of excess stock. The figure represents a one-off saving, but as he puts it: "You then live off the fat of the land as you use up the stock and your ordering patterns become much more stable."

The trust claims that savings are also made against the costs of running a time-consuming manual system. "We are talking about saving nursing time, stock control and stock checking which are a real bane in the life of most nurses," says Medwell.

He refers to a survey by the Nursing Times which found that more than a third of nurses spend at least an hour finding items of equipment during an average shift. The items most often sought were pumps, drip stands, thermometers, keys and mattresses.

At Leeds its computerised system allows supply staff to check wards and departments and make sure that stock is topped up. "Staff will go in with handheld devices, in the same way you see stock replenishments in Tesco or Asda, and they look at the shelves and that's across all departments, lots of different wards," says Medwell.

Barcode scanning has also helped reduce over-purchase of high value products, such as stents used by the cardiac theatres. The NHS Logistics Agency found that before computerised system, the theatres were operating with a stock level of about £1.6m, which was managed by two nurses who raised orders using a paper-based system.

According to the agency the paper-based system contributed to incorrect product codes being used for ordering, which interrupted supplies and meant a lack of management information, plus purchasing tasks took the nurses away from patient care.

During the implementation a stock check found that the cardiac theatres had £200,000 of stock which was "no longer in use" and the overall stock level was reduced to about £700,000.

Shortly after the project started in 2002, the then health minister Lord Hunt visited the trust and was taken to see the computerised inventory system in action. At the time Keith Lilley, head of supplies, said: "Purchasing within the trust has been successful over the last three years in delivering over £7.5m of cash releasing savings as well as over £20m cost avoidance savings."

However, other than the £500,000 saving in trauma, spinal and neurology theatres, Medwell has no current figures for savings and says that the costs of implementing the system is commercially confidential.

You don't have to spend a lot of money to save a lot of money

Roger Lamb, health sector manager at GS1 UK, says: "The savings are against not running a manual system, so it is a shift, for a marginal amount of money you are making enormous savings"

Medwell adds: "The costs are very, very low. I can give you some ball park figures… but when you consider when we went into our elective orthopaedic area we found stock that was valued at £388,000 above what they thought they had, the cost of the system is minimal, it is much less than a 10th of that to implement it and run it."

Asked whether other trusts are considering implementing a similar systems, Lamb says: "I think a number of trusts are looking at it ... I guess this is an area where there has been less emphasis placed on reducing costs, but obviously the new government coming in, they have had a root and branch look at the way these things work."

But he cautions that implementing this type of system cannot be done with a "big bang approach".

"In order to get the benefit of doing this you have got to integrate what you are doing with your internal systems, so your Oracle accounting system, your SAP system. There's a lot of internal integration and interoperability required."

This article was originally published at Guardian Professional. Join the Guardian Healthcare Network to receive regular emails on NHS innovation.

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