The NHS could be saving £5 billion a year by 2020 with better use of staff and medicines and more efficient processes and systems in general, according to findings of an interim report by Lord Carter.

Lord Carter was assigned the task of working with hospitals to explore how money could be saved by doing things more efficiently and spreading best practice. 

He concludes that annual savings of up to £2 billion a year could be delivered by improving workflow and containing workforce costs, while a further £3 billion could be bagged through improved hospital pharmacy and medicines optimisation, estates and procurement management.

A series of small reforms could make a huge difference at time when the NHS is facing a tremendous financial challenge. Even with the government commitment of an extra £8 billion, the NHS itself must garner efficiency savings of some £22 billion by 2020 if it is to have any hope of balancing the books.

Small reforms

Carter’s review highlights several examples of where minor changes could help reduce the financial burden. In one such case, a hospital restricting use of a soluble steroid (costing £1.50 a go) to just children and patients with difficulty swallowing giving the solid form (at just 2 pence) to everyone else generated savings of some £40,000 a year. 

Elsewhere, one hospital saved a massive £750,000 a year just by improving management of staff rostas, annual leave, sickness and flexible working, regaining the £10,000 lost from staff claiming too much annual leave.

“The NHS has some of the best hospitals in the world both in terms of quality, innovation and operational efficiency. The challenge is to lift hospital efficiency to a consistently high standard in every area of every NHS hospital and, where we already perform well, innovate to improve further,” Lord Carter said.

Rob Webster, Chief Executive of the NHS Confederation said the potential savings outlined in the review “need to be tested and developed with the wider NHS, so that final savings targets due to be handed to the NHS from September are owned by the whole service”.

NHS ‘not wasteful’

But he also argued that “while it is fair to say waste exists in the NHS, it’s not true to say it is wasteful,” noting that data on spending and outcomes “show the NHS is relatively efficient compared to other countries and our members’ efforts to reduce costs in the last parliament delivered almost £19 billion worth of savings”.

The Royal Pharmaceutical Society said that NHS-based medicines procurement pharmacists “are working diligently” to ensure medicines are purchased at the lowest price possible, but stressed that there remain challenges with medicine supply chains, “which means greater efficiency will require the pharmaceutical industry and distributers to work collaboratively with the NHS to ensure timely availability of medicines”.