Thursday 19th Oct 2017 - Logistics & Supply Chain

Sick and tired

Efforts to improve supply chain efficiency in healthcare in the UK run into unique challenges, not least striking a politically acceptable balance between cost saving and quality of care.

Representatives from pharmaceutical companies who attended a Supply Chain Standard debate on inventory management last autumn made it clear that healthcare supply chains are different. If supplies are interrupted, people die, one attendee gloomily pointed out.

However, with around a quarter of hospital budgets going on supplies, the opportunity for savings is undeniable. Supply chain inefficiencies consume resources that could be used to boost hospital budgets and make important treatments more widely available.

But it”s a tough call. Healthcare supply chains are becoming increasingly complex. Major hospitals are pooling their resources, specialising in particular areas of healthcare and introducing new services, many of them outside the traditional hospital set-up.

”Traditionally, hospital managers have focussed on managing within a single hospital but increasing network complexity is presenting managers with a new set of supply chain challenges,” says Jonathan Byrnes, a senior lecturer at Massachusetts Institute of Technology.

One of those challenges is quality assurance – verifying the provenance and history of drugs and equipment – which has become a crucial healthcare supply chain function.

The UK government has been making big efforts recently to overhaul the supply chains underpinning the National Health Service. For example, investment has been made in e-procurement systems to channel orders to pharmaceutical companies and streamline the process of prescribing drugs.

These innovations are part of a €16bn NHS IT modernisation programme called Connecting for Health, which has created a national network for the exchange of electronic patient data.

Some 18 months ago, procurement of medical equipment was privatised in a bid to meet a €1.3bn annual savings target set by the government. The Department of Health contracted out this side of its activities to NHS Supply Chain, which is owned by logistics firm DHL. The purchasing of drugs remains the responsibility of the Purchasing and Supply Agency, which is still run by the NHS.

Privatisation is not a move that has been universally welcomed by the healthcare industry. Some medical device suppliers, clinicians and groups representing patients have banded together in an organisation called the Medical Technology Group to resist what they see as a reduction in the quality of healthcare.

One of their complaints is that clinicians are not able to order the devices they think best for individual patients – for example, insulin pumps.

”It is vital that doctors are able to prescribe the most clinically appropriate product for each patient because if the range of pumps available to them is restricted on the grounds of cost savings, ultimately patients will suffer,” says the group.

”As far as the healthcare supply chain is concerned it”s in out, in out, shake it all about,” says Roger Lamb, healthcare manager of the GS1 standards body. ”There are more opportunities for improvement than you can shake a stick at.”

The auto ID enabled by bar codes allows hospitals to trace the lifecycle of surgical instruments GS1 is just one of a number of organisations working on boosting supply chain performance. The standards body is helping the NHS introduce bar codes to track and trace drugs, medical devices and assets. The use of auto ID technology can lead to big cost savings, says Lamb.

The auto ID enabled by bar codes allows hospitals to trace the lifecycle of surgical instruments, especially during decontamination and sterilisation process.

And so far as hospitals” pharmaceutical distribution procedures are concerned says GS1, 50 per cent of the estimated 72,000 deaths in the NHS are caused by medication errors – some 34 per cent associated with drug administration.

Supply chain improvement may be a hot potato politically but it offers the prize of benefits for both patients and administrators.

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