We must find new ways to fund equipment within the NHS

10 Feb 17

Equipment funding in the NHS is an urgent and ongoing requirement, but lacks a coherent strategy. What funding methods are available to stop equipment becoming technologically obsolete, unaffordable or unrepairable? 

MRI scanner

It will cost £790m to replace all the MRI scanners purchased during the expansion period in the last decade Photo: Shutterstock

 

Trust boards are in an increasingly difficult position when it comes to balancing their books and making savings. At the same time, they are under pressure to meet everyday demands. Equipment replacement is an expensive and ongoing requirement.

In 2011, the National Audit Office estimated that the cost of replacing all the centrally funded MRI units purchased during the expansion programme of 2000-07, would be in the region of £790m and that is only one specific category of medical equipment.

Figures released in February 2016, when the government provided funding for radiotherapy treatment units, stated that 63% of 111 English trusts had at least one unit older than 10 years. Twenty one per cent of linear accelerators were in the same position.

Despite this, equipment replacement doesn’t seem a high priority for central government. The National Audit Office has produced just two reports relating to the management of medical equipment – in 1999 and 2011 – compared to multiple reports relating to the Ministry of Defence equipment plan and major projects.

This begs several questions:

  • How is NHS England supposed to gather intelligence in relation to equipment management?
  • How are trusts performing in relation to each other?
  • Why isn’t there an NHS-wide requirement to provide details of major projects and equipment plans for independent review when the costs are considerable and the requirement ongoing?

With such a pressing need, perhaps it’s time both to revisit previous conversations and consider new, radical approaches.

First, a greater focus on asset management in an organisation-wide context would bring big benefits to NHS trusts. Clearly identifying services and their equipment requirements will help with planning, costing and achieving short-, medium- and long-terms goals.

Actions could include:

  • consolidation of maintenance contracts as part of the Whole Life Costing Model, ensuring maximum benefits;
  • risk reduction relating to the use of equipment past the end of its recommended life and once manufacturer support expires
  • Identification and reduction of any operational cost inefficiencies through the use of Radio Frequency Identification (RFID) tagging to track equipment usage, location and loss;
  • Fine tuning processes for evaluation of important/urgent or ‘nice to have’ investments;
  • Reducing the ‘fire-fighting’ effect through effective planning. Although impossible to eradicate completely, there will always be a CT tube that blows without warning and decimates the contingency budget, but could the use of insurance nullify this impact?

Secondly, could trust procurement departments explore more innovative ways of looking at economies of scale and alternative funding routes?

Collaborative procurement across trusts has proved effective at reducing equipment costs in the past but is constrained by the number of other trusts that want to procure the same type of equipment in the same financial year.

A more radical approach would be to look at a long-term, say five-year, procurement plan across trusts and including clinical commissioning groups. This could be appealing to equipment suppliers who would be able to plan their manufacturing programmes more effectively and avoid the traditional end of year procurement frenzy.

Achieving this would rely heavily on improved communications, the removal of barriers between purchasers and providers, transparent and effective processes being put in place and well-managed, plus the co-operation of vendors.

For some equipment, common across primary, secondary and tertiary care, a collective approach to procurement would encourage standardisation and reduce compatibility issues associated with connecting across systems as well as increase staff skills and reduce risk of error through familiarity with common equipment.

Finally, should they look again at alternative funding options? PFIs have been criticised for being expensive and are no longer supported by government, but a well-managed and comprehensive Managed Equipment Service that covers all medical devices, is not weighted in favour of a particular vendor, offers a single transparent and auditable service from procurement to disposal and replacement might be worth exploring further.

As well as this, working collectively with NHS Supply Chain will help influence how funds received directly from the government are utilised, maximising the benefits of these purchases. 

In addition, they could make much greater use of innovation funding for specific equipping projects. Some trusts might look to charities, or freeing up underutilised space and leasing it out to fund equipment. Jim Mackey, chief executive of NHS Improvement, announced in late November last year about the possible creation of a new NHS bond that would help to accelerate investment strategies

The NHS equipment funding issue will not be solved overnight. But it is essential that NHS trusts have a coherent, long-term strategy in place, which could involve much closer partnerships with other trusts, being clear on priorities and taking full advantage of all the funding options open to them. 

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