NHS – Excessive spending on paper, clips and gloves.

Yesterday (2 February 2011) a report published by The National Audit Office (NAO) discovered that the NHS could be spending as much as £500m on stationary. From January 2010 to January 2011 the NHS purchased around 66,000 products, most of which were unused, overpriced or simply not needed.

The report continues to warn Ministers that the current “reforming” will reduce the governments influence over the NHS purchasing practises. According to the report (which only includes English hospitals) there were discrepancies with various purchases made throughout the year. Across the 66,000 items purchases there was an average cost variation of 10%, however 5,201 items managed to hit a staggering 50%.

The report goes on to claim that on average each Trust will be able to save between £900,000 and £1.5m per year by paying the lowest price at point of purchase.

Across the 61 trusts 1000 orders were made last year for A4 paper alone. In addition because trusts are not collaborating on orders, there are lots of small purchases and Trusts are missing out on discounts for bulk orders.

Also on four of the key product areas (Gloves, Cannulas, Administration Sets and Paper) it is estimated that by consolidating weekly purchases the 61 trusts, collectively, could save £635,000 per year, in addition by consolidating on monthly purchases the trusts could increase savings to £918,000 per year.

As a result of the trusts not buying in bulk , there is a huge variation in what is ordered by each trust. For example, “21 different types of A4 paper, 652 different types of surgical and examination gloves, 1751 cannula (tubes inserted to remove fluid) 260 different types of administration sets (different types of drip/blood sets, i.e. IV).

Key parts of the Governments reforms for the NHS involve hospitals having MORE independence, inferring that the Department of Health will be unable to influence the purchasing decisions of the hospitals.

NAO goes on to claim that by buying more efficiently, using bulk orders and buying less frequently could save hospitals a minimum of £500 million per year.

Amyas Morse, head of the National Audit Office, said today:

  • “At least 10 per cent of hospitals’ spending on consumables, amounting to some £500 million a year, could be saved if Yrusts got together to buy products in a more collaborative way.
  • “In the new NHS of constrained budgets, Trust chief executives should consider procurement as a strategic priority. Given the scale of the potential savings which the NHS is currently failing to capture, we believe it is important to find effective ways to hold Trusts directly to account to Parliament for their procurement practices.”

Should the government be looking into addressing this problem? Is this a short fall in their newly developed NHS reform? If the reform goes ahead could the problem get even worse as hospitals become more independent of each other?

Source: http://www.nao.org.uk/publications/1011/nhs_procurement.aspx

John Crisford
Tel: 01277 822922
E-mail: johncrisford@sherwoodhealthcare.co.uk
Web: www.sherwoodhealthcare.co.uk
Twitter: @SherwoodHealth

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