Lord Carter’s review of efficiency in hospitals suggests how large savings can be made by the NHS. The final report
was published in February 2016 and, amid a changing political NHS environment, the demand for savings seems to dominate every discussion about healthcare. The report is based on the principle of benchmarking different hospital services and also highlights some examples of therapeutic management for a few specific medicinal products. However, the projected savings, particularly from the services elements, are ambitious. Any savings achieved will be essential to try to balance the NHS books.
The Carter report highlights the need for more clinical pharmacists but does little to support or promote other critical pharmacy services, which are equally as important to provide effective pharmaceutical care for patients. Important medicines management services are described rather despairingly as “infrastructure services”. This term denigrates their criticality to a successful pharmacy service because it is used to describe other pharmacy services, such as aseptic pharmacy, compounding, quality control, medicines information, homecare, clinical trials, research, formulary and provision of pharmaceutical services to other organisations.
Hospital patients expect to receive the right medicines, the right formulation, the right quality and the right quantity at the right time. Merely increasing a patient facing workforce, as suggested by Lord Carter, will not necessarily deliver this expectation. Other hospital pharmaceutical experts are needed to ensure that the operational aspects of a pharmacy service are delivered to the highest professional standards.
Care must also be taken to ensure that all the so-called hospital pharmacy “infrastructure” services are not belittled or disregarded. Those involved at the operational level know that the “infrastructure” is imperative to the success of both the pharmacy services and the hospital as a whole.
Non-patient facing roles
Hospital medicines comprise approximately 5% of the total cost of the NHS,
and therefore guidance on savings in the report must be clearly focused and targeted towards improving the situation and should not cause confusion or uncertainty.
Creating a plan of targeted medicines to manage in order to reduce costs is understood and familiar, although there is much debate about the source of the resources required to complete the work. Some early success with this approach has already been reported, such as with soluble prednisolone tablets by reserving the use of the more expensive soluble tablets only for patients with swallowing difficulties
. On the other hand, adding further tasks to pharmacy services by enforcing some ad hoc performance indicators will require careful thought to prevent unnecessary workload. For example, medicines procurement leads are responsible for delivering a challenging service often with limited resources. They are constantly under pressure to ensure a 100% supply of the highest quality products to patients, despite external supplier performance far nearer to 90–95%. These dedicated hospital professionals are an integral part of providing clinical care to patients and form part of the clinical team, although they are not necessarily patient facing.
When considering pharmacy services it is also important to understand the principles of how an effective procurement and supply chain management system should work. These principles are already well established within the NHS (and outside the NHS) and have been delivered by the Department of Health (DH) in many different guises over the years. Indeed, the DH report ‘NHS standards of procurement’
, circulated in 2012, was produced specifically with the intention of describing best practice performance standards in hospital procurement. This report is a comprehensive account of what constitutes an effective procurement organisation and contains details of many helpful performance standards that are intended to encourage and facilitate best practice in the hospital sector. If trusts had embraced the outcomes of this work and had adopted its performance standards, then there would inevitably be increased efficiency and productivity, as well as enhanced savings for the NHS. Interestingly, medicines procurement systems do seem to have already achieved many of the objectives set out in this document.
The Carter report was limited in content and described a handful of minor performance measures that now have to be implemented
It was therefore surprising that the Carter report only referenced this landmark DH work and did not explain how effective medicines procurement is structured already. Instead, the report was limited in content and described a handful of minor performance measures that now have to be implemented. The remaining 100-plus performance standards that were identified in the ‘NHS standards of procurement’ report seem to have been ignored. The limited attention to the detail of procurement and the medicines supply chain by Lord Carter is disappointing.
Medicines procurement needs investment with more resources, just like clinical pharmacy, so that we can deliver effective medicines procurement services and secure the savings that the NHS needs. The ‘NHS standards of procurement’ report provides a more comprehensive understanding of the intricacies of the procurement process and therefore tries to establish a more effective model for monitoring performance, which should be adopted more widely.
Challenges of benchmarking services
The Carter report demonstrates the benefit of benchmarking across hospital trusts. It highlights the variations in practice seen between organisations and recommends following best practice. Although this management approach may work at times, there are inherent difficulties in benchmarking services. Many hospital trusts are now diversified and difficult to compare easily. Trusts differ in their complexity and are becoming multi-site institutions spread over large distances offering different ranges of local, regional and national specialties (e.g. Imperial College Healthcare NHS Trust and Barts Health NHS Trust in London). The result of this diversification is that the operating system, workloads, capacity and processes have become vastly different for individual pharmacy services.
How do we accurately compare like with like? There are no standard or typical hospitals and, although the weighted activity measures used may be a useful tool for comparing hospitals or other services, there appears to be no evaluation made of the accuracy of this tool specifically for medicines optimisation and the associated pharmacy services.
If benchmarking is the preferred management approach to monitor the effectiveness of pharmacy services then, because of the limited resources currently available, any data collected should be: easily identifiable and understood; clear and simple to define; easy to measure and collect, preferably incorporated as part of the day-to-day work; unambiguous so like can be compared with like; meaningful and have a useful impact; be a measure of the pharmacy service performance only (and not other hospital services); and limited to the most essential information.
Conflicting and missing KPIs
The main performance indicators for benchmarking procurement and stock management services found in the report appear to be of relatively minor importance and may be unachievable. For example, what would be the savings if a trust could achieve the target of five deliveries per day? Where would the savings be derived from? Will the same amount of stock be ordered and stocked by the trust? This performance target appears to be opposed to another key performance indicator (KPI) that requires keeping stock levels down to 15 days, which may only be achieved by more frequent ordering.
We should focus on performance indicators that drive increased effectiveness and efficiency
We should be measuring other related performance factors that are perhaps more important and relevant than those chosen by Lord Carter. We should focus on those that drive increased effectiveness and efficiency. Examples of these include:
- Ensuring medicinal products meet quality specifications (e.g. unlicensed medicines);
- Ensuring the availability of stock (e.g. amending stock levels, order quantities) and reducing the number of stock outs to internal customers and patients;
- Managing manufacturers and wholesalers in order to reduce the number of missed and erroneous deliveries by suppliers;
- Managing medicines shortages, including obtaining clinically agreed substitutes where possible;
- Claiming clawbacks from suppliers after failure to comply with contracts;
- Increasing savings through more procurement initiatives;
- Implementation of patient access schemes and other innovative discounting methods;
- Managing homecare services providers, including liaising with patients and healthcare providers when required;
- Resolving invoice queries;
- Ensure compliance with all financial systems, governance processes and regulations;
- Form partnerships with pharmaceutical sales representatives, using product knowledge to negotiate;
- Ensuring adherence to local, regional and national medicine contracts;
- Updating computer systems with medicinal product files, cost centre codes and supplier details;
- Developing systems to integrate medicines procurement functions within finance, such as hospital charging systems;
- Ensuring adherence to the formulary and NHS capacity improvements programmes.
There is little point in providing clinical advice on gentamicin blood levels in renal failure when there is no stock of gentamicin on the ward
Use of non-NHS staff
Handing over the procurement of billions of pounds worth of hospital medicines to non-NHS staff, as suggested by Lord Carter, would be a mistake. Too much is at risk when there is no evidence of savings. Considerable knowledge and expertise of pharmacy, medicines and hospitals will be required, as well as use of a foolproof IT system. The complexity and impact of the medicine supply service should not be underrated or undervalued. There is little point in providing clinical advice on gentamicin blood levels in renal failure when there is no stock of gentamicin on the ward. Failure to provide this critical service effectively will only serve to add financial and clinical risk to the trust.
Hospital procurement and supply chain systems now need to be even more closely integrated into hospital systems. The use of non-NHS staff will increase concerns over “conflict of interest” for trusts since there are medicine budgets worth millions of pounds involved. Careful and continual close management is essential to ensure adherence to governance arrangements. The risk is so high that a complete understanding of how this specific conclusion was reached by Lord Carter should be circulated before any trust considers implementation. This would help explain why the additional risks should be taken and where the savings, if any, can be gained.
Infrastructure services should remain core
The Carter report makes reference to pharmacy “infrastructure services” with a view to considering what is the most cost-effective method to deliver each of these services, including provision by a third party. However, there are strong arguments that many of these should remain core services, especially the medicines supply service. These arguments do not appear to have been considered by Lord Carter in his report. What we do know is that the service failures in the supply chain caused by manufacturers and distributors continue to cause concern and, as a result, deliver an unwarranted high level of shortages (e.g. lorazepam and cefuroxime injections). Also, the poor quality service of some commercial home care providers will be at the forefront of many chief pharmacists’ minds following events in 2013–2014 where the service of one homecare provider in particular was so poor that a patient safety alert had to be issued
An efficient medicine supply service, as well as other “infrastructure services”, are essential and should continue to be treated as a core part of any hospital pharmacy service. These services will need to be carefully nurtured and resourced in order to maximise outputs. Crude and ill-managed benchmarking of services will not provide the savings required.
Allan Karr is a management consultant at Karr Consultancy Ltd (formerly pharmacy business services manager, UCL Hospitals NHS Trust and member of the Pharmaceutical Market Support Group).
 Operational Productivity and Performance in English NHS Acute Hospitals: Unwarranted Variations, Lord Carter of Coles, Department of Health. February 2016. Available at: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/499229/Operational_productivity_A.pdf (accessed August 2016)
 NHS Confederation. Key statistics on the NHS. 12 May 2016. Available at: http://www.nhsconfed.org/resources/key-statistics-on-the-nhs (accessed August 2016)
 Department of Health. NHS procurement: raising our game. 28 May 2012. Available at: http://www.sci-ware.com/documents/NHS%20Procurement%20raising%20our%20game.pdf (accessed August 2016)
 Newman M & Wright O. Private contractor Healthcare at Home blamed for NHS drug delays. The Independent 2 June 2014. Available at: http://www.independent.co.uk/life-style/health-and-families/health-news/exclusive-private-contractor-healthcare-at-home-blamed-for-nhs-drug-delays-9475280.html (accessed August 2016)