NHS procurement 'fragmented and wasteful', says critical report into high-value equipment purchasing

The criticism comes just eight months after the National Audit Office first highlighted the huge amount of waste in the way the NHS buys small consumables such as gloves and syringes. It estimated that, if improvements were made, the service could save a mammoth £500m a year. The follow-up report from the PAC supports this view, dubbing current purchasing systems ‘fragmented and wasteful’. It concentrates mainly on the procurement of high-value capital equipment, namely MRI, CT and linear accelerator (Linac) technologies.

Currently the value of these three imaging devices within NHS trusts is £1billion and it is estimated that over the next three years £460m worth of machines will need to be replaced; money the increasingly cash-strapped NHS does not have readily available. And, according to the PAC report, the only way it will be able to meet this ongoing demand is by significantly improving the way it purchases equipment, concentrating on bulk buying rather than individual trusts doing their own thing.

The document states: “We are concerned that the NHS is failing to optimise its purchasing power, which is crucial at this time, when £20billion of savings are required by 2015.”

The problem has been exacerbated since 2007 when the Government devolved responsibility for NHS procurement and management to individual trusts, with no pressure or demand on them to work together to achieve economies of scale. And, while national procurement frameworks are available through NHS Supply Chain, the Department of Health (DH) has no mandate to force trusts to use them and, until now, NHS Supply Chain has not placed any bulk orders for these three types of machine, despite dealing with 80% of the NHS purchases.

As well as failing to collaborate on purchasing, the report claims trusts are also being ‘hobbled’ by a lack of adequate information on MRI and CT activity that would enable them to assess cost, performance and capacity across the system as a whole. It shows the average number of CT scans per machine varies from 7,800 to 22,000 a year and opening times at various trusts range from 40 to more than 100 hours a week. There are also big differences in response times, with 13% of cancer patients not getting access to radiotherapy and 50% of people who have a stroke not getting a scan within 24 hours.

Margaret Hodge MP, chairman of the PAC, said the committee was ‘shocked’ by the ‘unacceptable’ variations, adding: “The DH has got to look at how machines can be used more efficiently to make the best use of scarce resources. At a time when the NHS has to make savings, it is unacceptable that money is being wasted. The department must set out how it is going to drive value for money in a devolved world where every trust is an independent foundation trust not answerable to it.”

The report supports a proposal by the Government that will require all trusts to produce data on MRI and CT usage, creating a national database that will allow individual trusts to better compare unit cost and benchmark performance.

Commenting on the issue, Health Minister, Simon Burns, said: “The Government is determined to do everything it can to root out waste and inefficiency so that NHS funds are spent on patients, not bureaucracy. Our plans to modernise the NHS will cut waste, save money and improve the quality of care for patients.

“Already the NHS has saved up to 15% on scanners by working with NHS Supply Chain to co-ordinate large orders over time with other trusts. This is the NHS working smarter, but full savings will not be seen until all trusts make use of this system.

“We are already developing a strategy that will enable the NHS to save £1.2billion as part of the QIPP programme by ensuring trusts take their accountability seriously and encouraging them to collaborate with each other more effectively.”

The findings were also welcomed by Andy Brown, managing director of diagnostics at NHS Supply Chain. In a statement he said: “We are currently working with the Department of Health to consider the recommendations.

“Buying and maintaining equipment during times of budgetary restraint will provide a significant challenge for NHS trusts and our range of frameworks to plan, aggregate, purchase or lease and maintain high-end equipment will be invaluable to the NHS. Our planning team uses trusts’ capital equipment plans to identify opportunities to buy expensive capital equipment together and place multi-machine orders.”

He said this approach had already resulted in savings in other areas, including a 12% saving over the framework price for mammography, a 16% saving for ultrasound equipment, and a 19% saving for flexible endoscopy devices.