Mid Essex Hospital Services NHS Trust achieves 28% saving through improved Orthopaedics procurement
As part of a wider programme of procurement cost reduction, Mid Essex Hospital Services NHS Trust have been working with INVERTO to reduce costs in the area of Reconstructive and Trauma Orthopaedics.
The Trust has saved over £300k within three months, representing a 28% saving on hip products alone, with the final savings delivery across all categories, including upper and lower limb, trauma and pulse lavage, forecast to be up to £500k.
With 12 orthopaedic and trauma consultants, Mid Essex Hospital Services NHS Trust undertakes 800 procedures per annum, split between hips and knees, spending approximately £2.9m with suppliers in this category.
The Trust does not have the specialist resources to undertake their own sourcing, but as a member of the East of England Hub, they fully utilised the hub contract, awarded in 2011.
Having already saved over £100k and rationalised their supply base to 2 suppliers for hips – one cemented, one uncemented – and one supplier for knees, the Trust was initially pessimistic but still keen to drive the maximum savings.
The Trust have utilised the specialist clinical procurement resources of INVERTO to undertake a focused project of orthopaedics procurement.
Starting with a detailed benchmarking, INVERTO analysed all supplier expenditure, categorising by supplier, sub-category and also procedure. This enabled a procurement strategy to be presented with clear recommendations based on industry benchmarks and a cost per procedure.
A cross-functional commercial/clinical team was formed. This included a consultant, lead nurse, theatre ordering technician and INVERTO. Meeting weekly, this team reports directly to the Clinical Director, Chief Financial Officer and Chief Operating Officer.
The team has executed a cross functional strategy, driving enhanced competition through a process of supplier engagement, presentations, negotiations and clarification. Utilising INVERTO’s product and market knowledge, all supplier offers could be compared at procedure construct level with the accurate modelling of cost scenarios. This was then presented to the Clinical team for review and discussion, giving clarity of information to enable decision making.
The process concluded with an internal clinical review and board paper recommendation. Following award, additional benefits have been accrued through the optimisation of consignment stocks.
From first analysis to the upload of verified catalogues, the first £300k, representing a 28% saving without any change of suppliers or products, has been delivered within three months. With further savings forecast from upper and lower limbs, trauma and associated products such as pulse lavage, this will deliver a total saving of £450-£500k across the category, a 17% saving.
The results of the project demonstrate the power of clinical engagement. The combination of specialist procurement expertise, clinical and commercial knowledge and the backing of the Trust Board is the key success factor to deliver savings in this critical area. Bill Martin, Consultant Orthopaedic Surgeon at Mid Essex Hospital Services NHS Trust says: “The initial worry that financial pressures would lead us towards accepting substandard implants or major inventory changes has not been borne out, and it was reassuring to be involved in the process as a surgeon.”