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

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• 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."