Smarter buying could save NHS £1.5bn

6 Aug 13
The NHS could save £1.5bn through better buying, health minister Dan Poulter has said.

By Mark Smulian | 6 August 2013

The NHS could save £1.5bn through better buying, health minister Dan Poulter has said.

Launching a programme to give the English service a more professional procurement function, Poulter said he also wanted to achieve a 25% cut in the £2.4bn cost of temporary staff by the end of 2016.

‘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,’ said Poulter.

‘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.’

A new strategy called Better procurement, better value, better care: a procurement development programme for the NHS, published yesterday, is also intended to improve skills in a service where ‘very few senior people in NHS hospitals know what good procurement looks like’, the minister said.

The NHS is to recruit a procurement champion with private sector expertise who will work with the minister and have the authority to improve procurement practices.

Hospitals will be required to publish what they pay for goods and services and  a ‘price index’ will be established to enable them to compare what they pay against their peers.

Poor value for money and bad contracts would be ‘exposed’ by making more data about the deals signed by local NHS bodies publicly available, Poulter said.

The report criticised the existing buying body NHS Procurement as ‘fast becoming commoditised’.

It had concerned itself with ‘a predominance of framework agreements and transactional procurements’ instead of emphasising strategic procurements ‘which, in high-performing world class organisations, regularly deliver significantly greater value, efficiencies, benefits and outcomes’, the strategy paper stated.

Among examples given in the paper was the variation in prices paid for medical gloves.

It said 38% of the £10.5m annual bill could be saved by switching away from the one dominant supplier.

Brand leaders in examination gloves charged £2.93 per box of 100 gloves, but other suppliers offered this for £2.67. In sterile surgical gloves, brand leading products were £56.50 per box of 100 while a comparable glove was available for £34.90 per box.

Use of temporary staff as a percentage of the total workforce varied from 9.9% at the Homerton University and Royal Brompton and Harefield foundation trusts down to nothing at South Tees.

If the highest ten employers of non-permanent staff reduced their use to the average of 4% of the workforce, savings of some £75m a year could be realised, the Department of Health estimates.


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