NHS Wields Knife on supplier costs

THE NHS hopes to save millions of pounds thanks to a national electronic purchasing system.

Centrally-run eprocurement, which could be in place by 2006, will squeeze supplier prices by combining demand across the whole NHS.

The initiative will greatly reduce National Health Service overheads, says Julie Armstrong, finance director of the Department of Health's Shared Services Taskforce, which is overseeing the project.

'At the moment we just don't have the information to aggregate purchasing across the whole country,' she said.

'Most trusts buy individually or in small groups, and if we can buy on a national basis there will be significant savings.

'This is really big numbers. The NHS has a non-pay spend of £6bn a year and we are looking to make a percentage saving on that.'

The system will also cut down on paperwork. A recent study by the NHS Purchasing and Supplies Agency (Pasa) estimated that some senior nurses spend as much as 14 per cent of their time requisitioning supplies.

Pasa is tendering for a project to create a web-based version of the supply catalogue it sends out on CD-Rom every month to NHS institutions.

The proposed eprocurement system will run alongside the online catalogue, allowing hospital staff to order supplies and be automatically billed.

The implementation will be combined with a single national finance and accounting system to replace the many different platforms used by the country's health trusts.

'At the moment it takes 10 months to consolidate the national accounts and we want to reduce that,' said Armstrong.

The project is the second centralised IT application planned for the health service. A £325m deal for a nationwide human resources system was signed last December. The eprocurement system is expected to cost more.

Formal tendering will begin at the end of the year.