NHS Supply Chain leader tells inquiry health trusts must exercise collective buying power to meet demands for investment in capital equipment

Andy Brown, NHS Supply Chain managing director for diagnostics, was giving evidence to the inquiry following the publication of a report by the National Audit Office (NAO) earlier this year, which revealed that NHS trusts face having to replace half of all MRI, CT and linac machines over the next four years, at the same time as dealing with a 17% reduction in equipment budgets.

Implementing a significant budget cut at a time when half of scanning and imaging equipment reaches the end of its lifecycle is a major challenge, but is nonetheless achievable if trusts decide to exercise their joint buying power

The NAO report showed that, over the past five years, NHS trusts have spent £50m a year purchasing imaging machines and the current value of this equipment in hospitals and specialist centres is around £1billion.

But, as the widespread rollout of these devices has been confined mainly to the past decade as applications have improved and prices become affordable, it is only now, after a typical 7-10 year lifespan, that they are coming up for renewal. Were all trusts to replace existing machines, without any additional investment, they would collectively need to find £460m in three years.

Brown said that while trusts were becoming more shrewd about procurement practices, there was still more they could do to bring costs down and make equipment more affordable.

He told the inquiry last week that NHS Supply Chain was planning to help trusts procure equipment collaboratively, sharing in discounts for bulk buying. He added: “NHS trusts need to look at the whole lifecycle cost of their medical equipment in order to plan efficiently and to buy at best price. Implementing a significant budget cut at a time when half of scanning and imaging equipment reaches the end of its lifecycle is a major challenge, but is nonetheless achievable if trusts decide to work with NHS Supply Chain and exercise their joint buying power. There is no mandate to do this, so it is down to every trust to recognise the significant economic benefits of collaboration through working with NHS Supply Chain.”

We have invested heavily in capital planning and leasing contracts to support trusts and this facility, if adopted widely, will lead to more and more bulk buy opportunities for the acute and commissioning sectors

He also urged organisations to ensure they properly manage and audit their assets and take advantage of funding opportunities such as leasing and managed service contracts, adding: “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. If trusts adopted good asset management practices for their medical equipment, this would enable them to plan better and buy better.

 “The NAO report acknowledged that 75% of the NHS trusts are utilising NHS Supply Chain frameworks and are enjoying lower acquisition costs and equipment cost savings. Naturally, trusts get the benefit of national pricing and we are already providing services to support a number of the recommendations in the report.

“However, there is no reason why the bulk purchasing arrangements we have already implemented could not be applied further with support from the NHS to co-ordinate and aggregate requirements. We have invested heavily in capital planning and leasing contracts to support trusts and this facility, if adopted widely, will lead to more and more bulk buy opportunities for the acute and commissioning sectors.”