How NHS SBS is transforming health care procurement
At times of extreme austerity in the United Kingdom, the public sector has taken a financial battering from central government. The emergency services has been no different, and when funding is cut to such critical operations, the wrong kind of cost-cutting can ultimately end up endangering lives.
This is where the back offices functions then come to the fore in the healthcare sector. But innovative and forward-thinking approaches are needed in order for the National Health Service (NHS) to remain cost-effective, lean and most importantly efficient going forward. Wild and frenetic slashing of resources can have a destabilising and catastrophic effect on any organisation.
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Therefore, the rise to prominence of NHS Shared Business Services is a welcome one for many. NHS SBS as a company started as a joint venture between the Department of Health and Sopra Steria, who both own 50 percent.
As the organisation celebrates its 10th anniversary, Simon Murphy who is Director of Finance & Accounting, makes a good case for a more co-ordinated approach to procurement and related facets. He said: “Since we started in 2005 we have grown to the point where we’re now providing Finance & Accounting, procurement and employment services to the NHS market.
“We provide a platform and services for all the commissioning organisations and 30 percent of the provider organisations; so those being the hospitals, ambulance and mental health trusts for example and the commissioners are the clinical commissioning groups which to an extent replaced primary care trusts in 2013. They are dotted around the UK and buy services from those hospitals.”
There are over 300 NHS organisations currently using the finance and accounting service, and NHS SBS collects well over £1 billion a year through its system. It collects around £14 billion of debt and 7.5 million invoices are processed annually. In short, there is no other group operating on this scale within the NHS.
Murphy states the reason procurement, finance and accounting as well as employment services were aligned together was because NHS SBS believed and still believes all are part of the same ecosystem and putting them together would give it real ability as a National Health Service, taking power back from the suppliers.
“In terms of company goals, we obviously need to remain commercially competitive to exist but really we are here to save the NHS money and to improve its services; one of the best ways to achieve this is through effective procurement.
“So for many organisations we operate full procurement, buying, catalogue management, the transactional procurement for requisitions and so on. We give them the IT system on which end users will raise those requisitions and access the catalogues, and we negotiate the contracts that go into those.”
Through finance and accounting side, this is where the partnership with Tradeshift comes in. Via the invoices sent in and the purchase orders which then go out, NHS SBS has a huge amount of data on what is being bought by various different organisations at what price and from which suppliers.
The partnership can help NHS utilise data better and therefore make better procurement decisions based on the use of the shared business services. It has an unrivalled view on what the NHS buys and a unique ability to help them buy it more effectively.
However, this does not mean new business opportunities naturally present themselves to NHS SBS. A business case has to be made to each of those provider organisations on an individual basis to garner their interest.
Murphy said: “That’s why we went into procurement, we felt we already had half the story. With the expertise, systems and data we’ve got we feel we have a pretty unrivalled position...CONTINUE READING
The challenges to vaccine distribution affecting everyone
While it is comforting to know that vaccines against COVID-19 are showing remarkable efficacy, the world still faces intractable challenges with vaccine distribution. Specifically, the sheer number of vaccines required and the complexity of global supply chains are sure to present problems we have neither experienced nor even imagined.
Current projections estimate that we could need 12-15 billion doses of vaccine, but the largest vaccine manufacturers produce less than half this volume in a year. To understand the scale of the problem, imagine stacking one billion pennies – you would have a stack that is 950 miles high. Now, think of that times ten. This is a massive problem that one nation can’t solve alone.
Even if we have a vaccine – can we make enough? Based on current projections, Pfizer expects to produce up to 1.3 billion doses this year. Moderna is working to expand its capacity to one billion units this year. Serum Institute of India, the world’s largest vaccine producer, is likely to produce 60% of the 3 billion doses committed by AstraZeneca, Johnson & Johnson and Sanofi. This leaves us about 7 billion doses short.
Expanding vaccine production for most regions in the world is complicated and time-consuming. Unlike many traditional manufacturing operations that can expand relatively quickly and with limited regulation, pharmaceutical production must meet current good manufacturing practice (CGMP) guidelines. So, not only does it take time to transition from R&D to commercial manufacturing, but it could also take an additional six months to achieve CGMP certification.
The problem becomes even more complex when considering the co-products required. Glass vials and syringes are just two of the most essential co-products needed to produce a vaccine. Last year, before COVID-19, global demand for glass vials was 12 billion. Even if it is safe to dispense ten doses per vial, there is certain to be significant pressure on world supply of the materials needed to package and distribute a vaccine.
It is imperative drug manufacturers and their raw material suppliers have clear visibility of production plans and raw material availability if there is any hope of optimizing scarce resources and maximising production yield.
It is widely known by now that temperature is a critical factor for the COVID-19 vaccine. Even the regions with the most developed logistics infrastructures and resources needed to support a cold-chain network are sure to struggle with distribution.
For the United States alone, State and local health agencies have determined distribution costs will exceed $8.4 billion, including $3 billion for workforce recruitment and training; $1.2 billion for cold-chain, $1 billion vaccination sites and $0.5 billion IT upgrades.
The complexity of the problem increases further when considering countries such as India that do not have cold-chain logistics networks that meet vaccine requirements. Despite India’s network of 28,000 cold-chain units, none are capable of transporting vaccines below -25°Celsius. While India’s Serum Institute has licensed to manufacture AstraZeneca’s vaccine, which can reportedly be stored in standard refrigerated environments, even a regular vaccine cold chain poses major challenges.
Furthermore, security will undoubtedly become a significant concern that global authorities must address with a coordinated solution. According to the Pharmaceutical Security Institute, theft and counterfeiting of pharmaceutical products rose nearly 70% over the past five years. As with any valuable and scarce product, counterfeits will emerge. Suppliers and producers are actively working on innovative approaches to limit black-market interference. Corning, for example, is equipping vials with black-light verification to curb counterfeiting.
Clearly, this is a global problem that will require an unprecedented level of collaboration and coordination.
Disconnected information systems
While it is unreasonable to expect every country around the world will suddenly adopt a standard technology that would provide immediate, accurate and available information for everyone, it is not unreasonable to think that we can align on a standard taxonomy that can serve as a Rosetta Stone for collaboration.
A shared view of the situation (inventory, raw materials, delivery, defects) will provide every nation with the necessary information to make life-saving decisions, such as resource pooling, stock allocations and population coverage.
By allowing one central authority, such as the World Health Organization, to organize and align global leaders to a single collaboration standard, such as GS1, and a standard sharing protocol, such as DSCSA, then every supply chain participant will have the ability to predict, plan and execute in a way that maximises global health.
Political influence and social equality
As if we don’t have enough stress and churn in today’s geopolitical environment, we must now include the challenge of “vaccine nationalism.” While this might not appear to be a supply chain problem, per se, it is a critical challenge that will hinge on supply chain capabilities.
In response to the critical supply issues the world experienced with SARS-CoV-2, the World Health Organization, Gavi, the Vaccine Alliance and the Coalition for Epidemic Preparedness Innovations (CEPI) formed Covax: a coalition dedicated to equitable distribution of 2 billion doses of approved vaccines to its 172 member countries. Covax is currently facilitating a purchasing pool and has made commitments to buy massive quantities of approved vaccines when they become available.
However, several political powerhouse countries, such as the United States and Russia, are not participating. Instead, they are striking bilateral deals with drug manufacturers – essentially, competing with the rest of the world to secure a national supply. Allocating scarce resources is never easy, but when availability could mean the difference between life and death, it becomes almost impossible.
Global production, distribution and social equality present dependent yet conflicting realities that will demand global supply chains provide complete transparency and an immutable chain of custody imperative to vaccine distribution.
The technology is available today – we just need to use it. We have the ability to track every batch, pallet, box, vile and dose along the supply chain. We have the ability to know with absolute certainty that the vaccine is approved, where and when it was manufactured, how it was handled and whether it was compromised at any point in the supply chain. Modern blockchain technologies should be applied so that every nation, institution, regulator, doctor and patient can have confidence in knowing that they are making an impact in eradicating COVID-19.