07 July 2006
The NHS across the UK could save around £690m a year — more than last year's reported net deficit for England — if it rented expensive medical equipment such as scanners rather than buying it outright, a report by financial services consultancy Siemens claims.
The study, Healthcare affordability — the global challenge, examined systems of health care finance in western Europe
and the US and found that the problem of 'frozen capital' — in which funds are tied up in purchasing equipment that rapidly becomes obsolete — was common, totalling approximately €30bn (£21bn).
'There is now a major question mark over the advantages of actually owning capital equipment,' the report argues. 'Technology tends to advance in sudden leaps. Organisations stuck with previous generation equipment will find it difficult to attract patients in an internal health “market”.'
The study identifies £1.2bn in capital equipment expenditure across the NHS which could be diverted to revenue expenditure if equipment were hired instead of purchased.
Jonathan Andrew, chief executive officer at Siemens, told Public Finance that approximately half of that (£690m) could be saved as, although part or all of the technology might become redundant in the UK, there was a market for it elsewhere. 'For NHS hospital trusts to be locked into old-fashioned systems of procuring the necessary equipment means they're not able to capitalise on the emergence of new technologies,' Andrew said.
'That makes it tough for them to compete with those in the private sector who are able to use more sophisticated finance models.'
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