How can the NHS save money on procurement?

By Frances Powrie September 24, 2015 3:24 pm

The Carter Review of NHS Productivity has set a goal to save £1 billion through procurement. The review team has honed in on price variation for consumable products as a key area where savings could be made, and it thinks the answer could be a single electronic catalogue covering everything from staplers to surgical gloves. This would aim to reduce the huge number of product lines available, as well as providing price transparency so that different hospitals aren’t paying wildly different prices.

This is a problem the NHS has been trying to address for a number of years, with the National Audit Office raising concerns as far back as 2011. But is the NHS missing a trick? The former head of fraud detection in the NHS today criticised the cuts to NHS Protect, which prevents and investigates fraud in the NHS, and which has seen its budget fall by a third since 2006.

Jim Gee also highlighted that the Government has cut back on exercises to measure fraud – meaning it doesn’t actually know how much it could be losing through scams such as overcharging for goods and services, or even failing to deliver them at all. Using figures from other industries, Gee estimates that the NHS could be losing £1 billion a year.

Of course, without having measurements in place, it’s hard to know how accurate these figures are. But at a time of extreme pressure on NHS budgets, when painful decisions are being made about restricting access to drugs and medical devices, this raises legitimate questions about whether NHS could be doing more to tackle fraud. The problem likely lies in the fact that it costs more money in the short-term to pay people with the expertise needed to successfully counter the efforts of fraudsters. However, if the NHS budget is to get onto a sustainable long-term footing, then it needs to provide the necessary resources now. Too often decisions about NHS funding are made on a short-term basis, with little thought to the long-term consequences. The NHS needs to be able to plan for the future, not just try and scrape through the present.

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