Features: December 10th, 2002

eCommerce for the English NHS

By Duncan Eaton.

This article was first published in eGov Monitor Weekly <http://www.egovmonitor.com/newsletter/signup.asp>

The vision outlined in The NHS Plan is to have a health service fit for the 21st century. This has been supported and endorsed by subsequent government publications and strategies which develop the government’s desire to reform and invest in all aspects of the NHS. The reforms include modern IT systems in every hospital and GP surgery. The National Finance and eCommerce project is a joint initiative between the NHS Purchasing and Supply Agency (NHS PASA) and NHS Shared Services.

April 2002 saw three key developments, firstly, increased investment in the NHS from the 2002 Budget leading to more investments to fund a ‘catch-up’ period – leading to health spending of 9.4 per cent of GDP by 2008. Secondly, the publication of Delivering the NHS Plan, setting out how the new model for the NHS and extra investment will bring improved services to patients and thirdly the final Wanless report on securing the future health service. NHS PASA is leading the development of eCommerce within the NHS in England.

NHS PASA is scrutinising the range of eCommerce solutions on offer in order to pinpoint those with the actual, or potential, capability to deliver the highly specialised solutions demanded by the NHS. The potential e-trading community for the NHS amounts to thousands of suppliers, all currently using myriad different systems. They are producing purchasing-related information – as are the trusts themselves. It is in making best use of this information that eCommerce methods come into their own. eCommerce has the potential to provide both the NHS and its supplier base with far reaching development opportunities and will enable us to achieve significant improvements at every stage of the transaction process.

Going for the benefits

Implementation of a national eCommerce solutions will realise significant savings as a result of improved processes, increased purchasing leverage and better quality management information. Major benefits will arise through:

  • improving the overall efficiency, both of its own purchasing processes and also of those of its suppliers
  • aggregating demand, enabling the NHS to wield greater influence over prices, quality and service delivery
  • sharing and consolidating information across supply networks.

Typically, trusts demonstrate limited integration in their buying arrangements. Implementation of a national approach to the purchasing and supply requirements of the NHS will bring benefits to trusts and suppliers. Trusts will gain cost advantages and increased efficiency, while suppliers will be working with a stable and unified demand base and with guaranteed commitment levels. Better market conditions and a better deal for everyone.

Implementation of a national eCommerce solution will realise significant savings as a result of improved processes, increased purchasing leverage and better quality management information.

Working with suppliers

The NHS Purchasing and Supply Agency is currently undertaking some preliminary studies with six pilot supply confederations across England. The confederation boundaries are usually coterminous with the relevant Strategic Health Authorities and comprise a number of hospital trusts. The Agency will be working with these organisations to jointly identify the key elements of current processes and the potential for implementing improved processes, enabled by new technology. This represents a broad and far reaching programme of change that will include undertaking electronically, traditional and discrete procurement-based activities, such as electronic tendering, e-catalogues and e-ordering overlapping financial and probity processes, such as invoice receipt and matching, payment of suppliers and audit rail/authorisation procedures generation of management and strategic supply information, such as budget planning, reporting and control, demand forecasting, supply chain performance management and strategic sourcing and supply decisions.

All of this will help us to understand practice from theory. It will challenge attitudes and the way people work. It will enable us to motivate and support the right people in the right jobs. It will give us the opportunity to evaluate the available technology and, at the same time, evaluate our own skills – or lack of them. It will give us proof of the concept for the final business case for the national finance and eCommerce system.

The latter project is one of the projects within the programme of Shared Services Initiative.

The projects are:

  • Electronic Staff Records Project (ESR)
  • Shared Financial Services National Roll-Out Project
  • Finance and eCommerce Project.

The National Shared Services Initiative is aimed at ‘the provision of high quality business support services to multiple customers from national centres of scale and excellence’ (from the ‘Vision of Shared Services’ presented to the Shared Services Programme Board in October 2002).

In conclusion, it must be remembered that eCommerce is a business process – it is re-engineering and culture change enabled by technology. It requires all parties to work together in ways that they are not traditionally used to. Potential suppliers of eCommerce systems must be committed enough to the project – and have faith in the outcome – to share the financial risk. In continuing to develop the eCommerce programme for the NHS we can foresee a real win/win situation.

Duncan Eaton is Chief Executive of the NHS Purchasing and Supply Agency

Ó KAM Ltd 2002