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NHS wasting money

Posted Nov 20 2012 2:24pm

New research has shown that the way in which the NHS purchases products wastes up to £500 million of taxpayer’s money each year.

The spending by 10 NHS healthcare trusts was analysed by accountants Ernst & Young. They discovered that procurement is extremely fragmented and that many trusts are paying too much for everyday items. The report looked at 11 everyday products and found that the difference between the minimum and average price has increased from 18% to 20% in the two years since the National Audit Office initially raised concerns about wasteful procurement in the NHS.

The government has previously announced that the NHS could save up to £1.2 billion over four years through more efficient procurement, and a £300-million cash fund has been establishes to enable the bulk purchase of equipment like CTThe abbreviation for computed tomography, a scan that generates a series of cross-sectional x-ray images/MRIAn abbreviation for magnetic resonance imaging, a technique for imaging the body that uses electromagnetic waves and a strong magnetic field. scanners and ultrasoundA diagnostic method in which very high frequency sound waves are passed into the body and the reflective echoes analysed to build a picture of the internal organs – or of the foetus in the uterus. machines A new bar coding system is also due to be introduced that is hoped will increase transparency and save money. A government spokesperson said: "The new system will take time, but ultimately it will result in the kind of price comparison website that already exists in other sectors, like supermarkets, and will revolutionise the tracking, safety and use of clinical products bought by the NHS."

The government is currently conducting a review of the NHS Procurement Strategy.

Joe Stringer, Partner at Ernst & Young, said the analysis raises "serious concerns", and he blames a "lack of transparency in the market" for leaving trusts unable to make more cost-effective buying decisions.

Some might argue that this lack of transparency is a direct effect of an increasingly competitive market within the NHS.

Indeed, Stringer notes that there is "a widespread misconception that price disparity is the inevitable consequence of policy decisions to encourage competition between NHS providers."

But, he warns, the failure by "the back office" to introduce transparency across the board "will only be felt more acutely in frontline care". 

"Price visibility will reduce costs and generate an opportunity for product suppliers and the NHS alike to deliver maximum value for the public purse," added Julian Trent, Managing Director of Peto, an independent product comparison website for the NHS.

In May the government announced that the NHS could save up to £1.2 billion over four years through more efficient procurement, and established a £300-million cash fund to enable the bulk purchase of equipment like CT/MRI scanners and ultrasound machines. 

A spokesperson for the government also said that a new bar coding system will be introduced to "increase transparency, save money and make care safer". 

"The new system will take time, but ultimately it will result in the kind of price comparison website that already exists in other sectors, like supermarkets, and will revolutionise the tracking, safety and use of clinical products bought by the NHS."

The government is currently conducting a review of the NHS Procurement Strategy, findings of which have not yet been published.

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