Research Identifies £300m Potential Cost Savings for NHS Trusts

Details of the new NHS spending plan released by the health secretary includes a sustainable plan for the NHS to deliver efficiency savings in the same way as the rest of the public sector.

The health minister declared that 'NHS primary care trusts and strategic health authorities would have to make significant reductions in their costs', with a rationalisation in both administration and management featuring high on the agenda.

However, Joel Haspel, CEO, Sentient Health, believes that supply chain optimisation should also become an NHS priority, in order to realise the cost savings the Government is demanding.

A recent report undertaken by McKinsey on behalf of the Department of Health highlighted that "although significant savings have already been captured, there is still an opportunity, estimated at £1.1-1.9 bn that could be realised through more effective supply chain/procurement management." Sentient Health, believes that £300m of the £1.1bn - £1.9bn could be derived from effective supply chain improvements alone.

Poor stock control is a major source of inefficiency for hospitals. Often trusts are surprised to discover that up to 30 percent of purchased medical and surgical products end up in the bin and that stock unused after 90 days has an 85 percent chance of being wasted. This represents approximately £300 million potential savings for the NHS, which could be achieved over a three year period, if effectively identified, managed and executed.

"We have already worked with a number of UK trusts to optimise their supply chain and have achieved considerable cost savings as well as improved efficiencies. At one trust, for example, we identified a possible saving of £1million which could be achieved by optimising inventory levels, reducing stock over ordering and minimising wastage from expired stock," Joel Haspel, CEO, Sentient Health explains.

"Poor stock control not only wastes valuable clinical time but can also lead to cancelled procedures, impacting the quality of frontline patient care. Typically, when we work with clinicians to review stock levels, we need to increase some product levels, whilst lowering others. We found at one hospital that in order to ultimately reduce stock by £600K we had to increase stock levels for 80 items in the first month," Haspel concluded.

Sentient Health is currently the only organisation to enable trusts to make decisions based on real evidence taken from existing data. By analysing trust data and the existing environment, Sentient Health can identify waste and quantify what savings could be achieved. There is often no need to make a major investment in new technology in order to realise the potential savings.

By enabling trusts to evidence the waste and align the clinical, purchasing, financial and materials departments, they can be assured they are taking the correct actions to make targeted savings. Sentient Health has a proven track record across the UK through its MedTrac® Hospital

Supply Chain solution. This is available to Trusts through NHS Supply Chain, whose services are delivered through DHL with whom Sentient Health works in partnership. Sentient Health's MedTrac® solution delivers the efficient control of medical supplies - tracking product consumption by patient, procedure and doctor.

Sentient Health uses a three step approach to identify cost savings across the supply chain:

  • Phase one - 'Take stock': Through our Evidence Based Savings Assessment' (EBS) we analyse a trust's existing data and the current environment in order to identify waste and quantify what savings could be achieved
  • Phase two - 'Take control': Guided by the EBS Assessment we then work with the trust to optimise stock control to deliver measurable savings. This is achieved through the introduction of MedTrac®, our supply chain management solution which tracks product consumption by patient, procedure and doctor. We can also leverage other inventory control tools such as NHS Supply Chains' eDC
  • Phase three - 'Stay in command': By finding the right long-term solutions, we help trusts create and command a truly efficient supply chain - that drives costs down and ensures that clinicians have exactly what they need, when it’s needed. Our constant aim is to ensure people and systems maintain control, eliminate waste and achieve targeted savings and we achieve this through our quarterly inventory performance assessments

    About Sentient Health
    Established in 1999, Sentient Health is a leading provider of healthcare supply chain solutions. It improves financial performance by enhancing operational efficiency. Sentient Health solutions are used throughout the healthcare supply chain, in the hospital at a ward level, at the distributor's warehouse, in transit and in the field.

    Sentient Health is a recognised thought leader, being amongst the most innovative companies in its field and constantly working with clients to develop even more effective ways to manage their supply chains.

    MedTrac® is a software service that enables the management of medical supplies throughout the supply chain down to the hospital ward and tracks product consumption by patient, procedure and doctor. Customers using MedTrac® improve their financial performance through improved inventory performance and reduced write-offs. The service model allows for limited up-front investment with immediate gains; ROI has historically been less than one year.

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