New ways of bulk buying supplies and medical equipment could save the NHS £1.2 billion to reinvest in patient care, health minister Simon Burns announced today.
Traditionally, the NHS has struggled to make the most of its buying power as there was very little knowledge between local hospitals about their equipment needs.
Mr Burns was speaking at the launch of a £300 million fund which will allow the NHS to benefit from the savings of bulk buying expensive medical equipment via NHS Supply Chain.
He also says the NHS must ‘raise its game’ when purchasing goods and services, such as gloves and sutures, catering and energy, to save at least £1.2 billion over the next four years.
The fund will enable the NHS to bulk buy large equipment such as:
- CT scanners,
- MRI scanners
- Ultrasound machines
- Cancer treatment technology.
The operating life for equipment such as CT and MRI scanners is ten years, after which it either needs updating or replacing because of wear and tear. There are over 200 of these large scale items that will need replacing over the next couple of years and the NHS will be able to significantly benefit from the discounts achieved via these bulk buy deals when replacing this important equipment.
In addition, hospitals are now being asked to drive forward improvements through a series of actions, being more transparent and assessing how they buy equipment and services, including:
- Publish the details of all contracts over £10,000
- Appoint a board executive to be accountable for procurement performance
- Regularly audit procurement.
The Department of Health says that having the cash fund available, the NHS Supply Chain are able to secure better bulk buys deals for the NHS with suppliers. As equipment is purchased by trusts, payment for it will go back into the fund, effectively replenishing it for future use.
Trial purchasing using this fund has already saved £11 million through orders that have been placed in advance via NHS Supply Chain with suppliers.
Mr Burns said: “Waste is unacceptable when we know there are simple solutions. That is why the NHS needs to buy smarter and get the best value for the taxpayer for every penny spent.
“We know that at least £1.2 billion could be saved over the next four years if the NHS innovatively changes the way it buys goods and services.
“This is the first step to better, smarter procurement in the NHS and we will be working closely with hospital trusts over the next six months to help them save even more money that can be reinvested in patient care.”
Andy Brown the managing director of business solutions for NHS Supply Chain said: “This important development will allow NHS Supply Chain to group together the purchasing power of the NHS for this vital equipment, make large commitments to suppliers and bring improved planning to the management and replacement of this equipment across the NHS and with suppliers.”
Procurement plays a valuable role in driving improvement in services. Better procurement means these savings can be reinvested to benefit patients. Our ambition is to put in place a world-class procurement system in the NHS that is responsive to modern suppliers.”