Minister announces drive to cut cost of NHS procurement
NHS trusts in England have been told to change the way they buy supplies and manage their estates, in a drive to cut procurement costs which ministers believe could save as much as £1.5bn a year.
A report published by the Department of Health found some parts of the NHS are wasting money by buying well-known brands of lubricating jelly for £2.77 a pot when cheaper alternatives are available for just 98p, using foam dressings priced at £19.87 for a pack of 10, when similar non-branded products can be bought for £11.74 or purchasing packs of 100 surgical gloves at £56.50 when a comparable glove is on the market for just £34.90.
A new NHS procurement champion, with private-sector expertise, is to be appointed to push for better practice across the health service, including hospitals getting together to bulk-buy equipment at a discount.
Hospitals will be required for the first time to publish what they pay for goods and services and be held accountable for what they spend, and a new “price index” will allow them to compare the deals they get with those obtained by other healthcare providers.
Launching the cash-saving drive, health minister Dan Poulter said: “Hospitals must wake up to the potential to make big savings and radically change the way they buy supplies, goods, services and how they manage their estates.
“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 gloves or syringes, simply because they haven’t got the right systems in place to ensure value for money for local patients.
“The money saved though our plans to cut wasteful NHS spending can be spent instead on the things that really matter - such as more operations or revolutionary new treatments.”
Dr Poulter has published a document, entitled Better Procurement, Better Value, Better Care, which found little consistency in the way the NHS spends taxpayers’ money and argued that very few senior people in NHS hospitals know what good procurement looks like.
The minister will lead a team drawn from government, the NHS and business to work with the new procurement champion to provide on-going scrutiny and guidance to the NHS in driving improvements to procurement and productivity.
The NHS will be told to cut its £2.4bn annual bill for temporary staff by 25% by the end of 2016. And the Department of Health will work directly with NHS suppliers to strike new deals to save money by bulk-buying expensive medical equipment like radiotherapy machines and MRI scanners;
Mike Farrar, chief executive of the NHS Confederation, said: “Lots of NHS organisations are already doing great work to scrutinise the ways they can reduce the amount they spend on goods and services and plough that money back in to care. But many more could be much more efficient if they fully recognised the power of strength in numbers and came together to drive down costs.
“We know there is much more we can do to get the biggest bang for our buck. By being more efficient with our procurement processes, we can spend more on direct care - this has to be a priority.”
Matthew Sinclair, chief executive of the TaxPayers’ Alliance pressure group, said: “This long-overdue initiative from the Department of Health ought to result in big savings which will mean less money being wasted on overpriced supplies.”
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