Substantial variation in the price of supplies bought by the National Health Service is costing the UK taxpayer as much as £500 million a year and could impact patient care, according to fresh research by Ernst & Young.
An analysis of spending by 10 NHS healthcare trusts showed that procurement practice in England is highly fragmented, with many trusts paying over the odds for everyday products.
The findings come two years after the National Audit Office (NAO) first voiced concern over wasteful procurement in the NHS, upon discovering that trusts were shelling out different amounts of cash for the same goods.
And going by Ernst & Young’s report the situation now is little improved, with some trusts paying more than twice (164%) the average price for essential items such as warming blankets, it said.
Looking at the 11 everyday products reviewed in the report, the difference between the minimum and average price has increased from 18% to 20% in the two years since the NAO warned that purchasing must become more cost efficient.
Joe Stringer, Partner at Ernst & Young, said the analysis raises “serious concerns”, and he blames a “lack of transparency in the market” for leaving trusts unable to make more cost-effective buying decisions.
Some might argue that this lack of transparency is a direct effect of an increasingly competitive market within the NHS.
Indeed, Stringer notes that there is “a widespread misconception that price disparity is the inevitable consequence of policy decisions to encourage competition between NHS providers.”
Price visibility to cut costs?
But, he warns, the failure by “the back office” to introduce transparency across the board “will only be felt more acutely in frontline care”.
“Price visibility will reduce costs and generate an opportunity for product suppliers and the NHS alike to deliver maximum value for the public purse,” added Julian Trent, Managing Director of Peto, an independent product comparison website for the NHS.
In May the government announced that the NHS could save up to £1.2 billion over four years through more efficient procurement, and established a £300-million cash fund to enable the bulk purchase of equipment like CT/MRI scanners and ultrasound machines.
A spokesperson for the government also said that a new bar coding system will be introduced to “increase transparency, save money and make care safer”.
“The new system will take time, but ultimately it will result in the kind of price comparison website that already exists in other sectors, like supermarkets, and will revolutionise the tracking, safety and use of clinical products bought by the NHS.”
The government is currently conducting a review of the NHS Procurement Strategy, findings of which have not yet been published.
