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NHS must improve purchasing power

Hospitals pay between £47 and £120 for identical box of blankets

Mark Gould

Monday, 19 November 2012

A snapshot survey reveals that NHS hospitals are not using their financial clout to bring down the cost of supplies. The survey of 10 NHS trusts reveals that prices for the same box of medical forceps ranged from £13 to £23 and for an identical box of blankets the lowest price was £47 but the highest over £120.

The survey revealed big variations across a range of other medical supplies including knee implants, syringe pumps and warming blankets.

The research was carried out by management consultancy Ernst & Young. Joe Stringer, an Ernst & Young researcher said the discrepancies were "staggering", and he warned that the problem was getting worse. Trusts, he said, were reluctant to share information for fear of helping their competitors.

"With the NHS facing sustained pressure to contain rising costs and demand within a flat budget, transparency must be introduced across the board.

"The consequences of inaction in the back office will only be felt more acutely in front-line care."

The findings come despite long-standing concerns from MPs and the National Audit Office over wasteful procurement. Last year an NAO report revealed the NHS could save half a billion pounds a year if it improved procurement.

The Department of Health says it is developing a barcoding system to help hospitals negotiate better prices.

Earlier this year the government said better purchasing could save the health service in England at least £1.2bn over the next four years, and announced plans for a "world class" procurement system. This included a cash fund to allow bulk-buying of equipment.

In response to the Ernst & Young survey Health minister Lord Howe said wasteful procurement was unacceptable.

"We are working on introducing a new barcoding system that will 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."

But shadow health secretary Andy Burnham said: "The government is encouraging hospitals to think and act like independent businesses. As a result, they're losing the potential for the NHS to use its collective buying power. Market-based health systems cost more not less and this is one of the reasons why."

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