Procurement Cost Saving Analysis

Efficiently procuring goods and services for large hospital Trusts is vital for an underfunded health system. The pandemic was a frenetic period for hospital Trusts, as in very short time periods, they sought to procure equipment and contracts to manage COVID patients. There is an ongoing need to ensure procurement is performed in the most effective way possible to maximise cost savings for hospitals.

There are significant roadblocks to efficiently running a procurement team. Many purchasing departments use legacy software, are not provided sufficient support to review and improve their processes, and work overtime to meet the needs of Trusts around the country. Fortunately, there is a wealth of information at the disposal of procurement teams, highlighting an enormous opportunity to harness this data, and identify cost-saving measures.

Edge Health was commissioned to find opportunities for consolidation and cost reduction through a variety of methods. Enormous product order datasets spanning five years for a very large hospital Trust in London were analysed. Edge Health identified costly contracts to renegotiate, preferred suppliers for the same items, optimal ordering and delivery routes, high-spend cost centres to focus on, and high-volume low-cost items to be targeted. The combination of these approaches would result in a significant cost-saving for the Trust.

Our analysis, supported extensively by real-world data, identified procurement cost-saving opportunities that would enable the client to save approximately £2.5m per year. These funds can be reallocated to improve healthcare outcomes.