In the current climate of funding challenges, rising service demand and costs, running a sustainable hospice is not just about focusing our attention and efforts on the top part of the profit and loss account.
It is no good maximising income generation if we do not pay just as much attention to how we structure the buying of our goods and services, we just leak cash from the holes in the bucket.
Effective buying to support our service delivery is absolutely critical – and what we aim to achieve here is not just a matter of price. We need quality goods and services, at low risk, delivered in a timely manner, with minimum draw down on staff and volunteer resource, who need to focus their expertise and effort on patient and family care.
Quality means good service, yes, but it also means working with sustainable suppliers, who have gone through a suitably qualified tender process which looks at the risks they may pose to the hospice in the longer term. It is no good signing up with the supplier who looks great on paper and who offers an attractive short-term price, but who goes bust half way through the contract, or who builds in hidden cost not foreseen at the point of purchase.
And what about the staff time involved in procuring sometimes complex and specialist services – utilities in a fast-moving energy market for example? How can we minimise the risk of inexpert purchase and all that indirect and hidden cost to the organisation? How can we ensure that we are not running multiple supplier relationships for the same goods or service, creating work and inefficiencies?
It may not seem to matter too much until we think about the fact that Gartner estimates the cost of processing one invoice, depending on the complexity, at between £4 and £30 each. If we are running lots of supplier relationships, with multiple invoices from each, someone is doing that work and that is all costing the hospice money – but it doesn’t appear on the P&L.
So, it is important that we buy as efficiently as possible and achieve the greatest possible value, not only in price, but across a range of factors to demonstrate to our commissioners and donors that we are spending their money in the most effective way possible and directing as much of that funding as possible to frontline care.
To achieve this we need the right expertise, and to achieve that different hospices are going about this in different ways. Some choose to use existing staff or volunteers; some have gone down the track of working with third parties who buy on their behalf and share savings. Some have appointed their own qualified procurement expert, whilst others have come together under the Hospice Quality Partnership to jointly procure and tap in to a centralised source of expertise, whilst aggregating their spend for greater buying power.
We can all learn from these different models and with that in mind, Hospice UK and HQP are running a masterclass on 13 September 2017 – ‘Buying Better – Driving Funds to Frontline Care’. We will showcase best practice from the sector; share intelligence; look at how to devise an effective hospice buying strategy; look at cultural challenges; and share how to make best practice buying decisions.
Through panel discussions and external expert speakers, together we can learn to buy better, work more effectively with suppliers, and discover how to work collaboratively and at scale.
Please join us and send a member of your team to share your experience with others, and to bring back to your hospice new ways of reducing costs and driving more funds to frontline care.
For more information and to book tickets visit Buying Better – Driving more funds to frontline care