In light of Don Berwick's recent advisory report for the National Health Service, this commentary by the Health Minister and his initiative send the wrong message. The Times of London reports:
Hospitals are to be forced to publish how much they pay for supplies under plans to end “scandalous” overpayments for basic goods.
Dan Poulter, the Health Minister, said, "We must end the scandalous situation where one hospital spends hundreds of thousands more than another hospital just down the road on something as simple as rubber glove or syringes, simply because they haven't the right systems in place to ensure value for money.
Those of us who have studied procurement in hospitals know that there is nothing "simple" about this problem.
While the unit cost of goods purchased is always worthy of attention, it is actually the stocking of excess supplies that is likely to be more wasteful. I'd wager that, if you visit the stores room in any NHS hospital (or for that matter, any US hospital), you would find an inventory that is far from the amount needed. Why is that?
In most hospitals, there is a lonely person who has to decide when to purchase the next shipment of gauze pads, or bandages, or whatever. He makes a personal judgment of this issue based on the speed with which those boxes leave his storeroom to head upstairs to the wards. He has no formal training in inventory management and often has no data system to support him in his decision-making. Accordingly, he employs informal rules of thumb for this ordering. His incentive is to "never run out," and so he will always order more than the hospital actually needs. He often works alone, and so when he goes on holiday, he orders still more extra supplies so that things will be all right in his absence.
But, it's worse than that, because the stockers on each ward and unit upstairs have exactly the same incentive. Although there is a recommended par value of goods in each local supply closet and cabinet, his incentive, too, is to "never run out," and so he will always collect more supplies than are necessary from the central stores. His job is complicated by the fact that the local closets and cabinets are often crowded and poorly designed, so the actual inventory on each floor is unclear.
Those of use who teach Lean process improvement techniques know that one of the most likely places to find opportunities for savings is in this sector of a hospital's operations. It is not uncommon to find that hospitals are over-purchasing by 10, 15, or even 20%. Then, because medical goods have expiration dates, a portion of the inventory is actually thrown out.
How does this all relate to Don's report? While his report focused on safety, the conclusions actually are generalizable:
NHS staff are not to blame – in the vast majority of cases it is the systems, procedures, conditions, environment and constraints they face that lead to . . . problems.
Improvement requires a system of support: the NHS needs a considered, resourced and driven agenda of capability-building in order to deliver continuous improvement.
Recognise with clarity and courage the need for wide systemic change.
Abandon blame as a tool and trust the goodwill and good intentions of the staff.
Give the people of the NHS career-long help to learn, master and apply modern methods for quality control, quality improvement and quality planning.
Make sure pride and joy in work, not fear, infuse the NHS.
The language used by the minister and the one-size-fits-all type of solution proposed for this particular area exemplify an approach in opposition to the one advocated by Don and his advisory body. It does not consider the root causes of the problem or systemic solutions. Equally important, the language used is not respectful nor supportive of the hard-working staff in the hospitals.
Hospitals are to be forced to publish how much they pay for supplies under plans to end “scandalous” overpayments for basic goods.
Dan Poulter, the Health Minister, said, "We must end the scandalous situation where one hospital spends hundreds of thousands more than another hospital just down the road on something as simple as rubber glove or syringes, simply because they haven't the right systems in place to ensure value for money.
Those of us who have studied procurement in hospitals know that there is nothing "simple" about this problem.
While the unit cost of goods purchased is always worthy of attention, it is actually the stocking of excess supplies that is likely to be more wasteful. I'd wager that, if you visit the stores room in any NHS hospital (or for that matter, any US hospital), you would find an inventory that is far from the amount needed. Why is that?
In most hospitals, there is a lonely person who has to decide when to purchase the next shipment of gauze pads, or bandages, or whatever. He makes a personal judgment of this issue based on the speed with which those boxes leave his storeroom to head upstairs to the wards. He has no formal training in inventory management and often has no data system to support him in his decision-making. Accordingly, he employs informal rules of thumb for this ordering. His incentive is to "never run out," and so he will always order more than the hospital actually needs. He often works alone, and so when he goes on holiday, he orders still more extra supplies so that things will be all right in his absence.
But, it's worse than that, because the stockers on each ward and unit upstairs have exactly the same incentive. Although there is a recommended par value of goods in each local supply closet and cabinet, his incentive, too, is to "never run out," and so he will always collect more supplies than are necessary from the central stores. His job is complicated by the fact that the local closets and cabinets are often crowded and poorly designed, so the actual inventory on each floor is unclear.
Those of use who teach Lean process improvement techniques know that one of the most likely places to find opportunities for savings is in this sector of a hospital's operations. It is not uncommon to find that hospitals are over-purchasing by 10, 15, or even 20%. Then, because medical goods have expiration dates, a portion of the inventory is actually thrown out.
How does this all relate to Don's report? While his report focused on safety, the conclusions actually are generalizable:
NHS staff are not to blame – in the vast majority of cases it is the systems, procedures, conditions, environment and constraints they face that lead to . . . problems.
Improvement requires a system of support: the NHS needs a considered, resourced and driven agenda of capability-building in order to deliver continuous improvement.
Recognise with clarity and courage the need for wide systemic change.
Abandon blame as a tool and trust the goodwill and good intentions of the staff.
Give the people of the NHS career-long help to learn, master and apply modern methods for quality control, quality improvement and quality planning.
Make sure pride and joy in work, not fear, infuse the NHS.
The language used by the minister and the one-size-fits-all type of solution proposed for this particular area exemplify an approach in opposition to the one advocated by Don and his advisory body. It does not consider the root causes of the problem or systemic solutions. Equally important, the language used is not respectful nor supportive of the hard-working staff in the hospitals.
