Nhs Wasting £1 Billion A Year On Supplies

[Mr. Miyagi]

NHS 'wasting £1 billion a year on supplies'

The NHS is wasting more than £1 billion of taxpayers' money a year as managers spend vastly differing amounts on the same supplies, the head of a government-backed healthcare efficiency drive claimed today.

John Neilson, managing director of NHS Shared Business Services (NHS SBS), said cash was being needlessly squandered by health trusts who are paying multiple prices for identical equipment - ranging from stationery to surgical instruments.

He also claimed that millions could be saved by outsourcing more NHS administration overseas to countries such as India.

In an interview with The Times, Mr Neilson said: "It's scary. We actually have multiple prices being paid for the same item in the same trust, in the same month."

He claimed that NHS trusts were routinely paying as many as 19 different prices for the same pacemaker, wasting up to £750 a time.

And he said a host of other equipment such as computers were being bought at needlessly high prices - wasting around 12% of the NHS's purchasing budget.

Mr Neilson said the offenders ranged from family doctors to elite foundation hospitals and that trusts across the country were also buying a "bewildering" amount of different equipment to do the same jobs.

The health service spends around £13 billion a year on buying equipment.

"If you talk about 12% of that, it takes us into the low billions," added Mr Neilson.

"They haven't got their purchasing under control at all."

Statistics showed that 18 NHS trusts paid 22 different prices for a J&J Linear Cutter surgical tool, with the cost ranging from an average £403, to a minimum £289.

There were also 10 different prices paid for Huntleigh flowtron boots - which prevent DVT - with 17 trusts forking out an average of £2,002. However the lowest price paid was just £482.

Mr Neilson said vast amounts of money could be saved if health managers worked together to standardise equipment and exploit the bulk buying power of the NHS.

"Out of 130 trusts we work with, only 30 of them buy the most commonly bought item. And that item is a Dell PC. Even if they all bought the same PC, just think of the savings that would produce."

He also said moving some NHS services overseas would help in the drive to save £20 billion by 2014.

Call centres in India already handle invoices and other administration for some trusts at a fraction of what it would cost in the UK.

But the health chief said there was a "UK sensitivity issue" preventing more outsourcing.

NHS SBS is a joint public-private venture set up in 2005 to get the the best value-for-money by outsourcing NHS administrative functions such as finance, accounting and payroll.

It is tracking the finances of a third of NHS trusts, who are spending £31 billion annually.

A Department of Health spokesperson said NHS SBS initiatives had so far delivered savings of over £50 million, which had been reinvested in frontline patient care.

A spokesman said: "As elsewhere across Government, we are working to use purchasing power to get the best possible deal for the taxpayer. NHS Trusts and Foundation Trusts are seeking substantial procurement savings in their planned efficiency savings of up to £20bn over the next four years."

My link

I don't know how many NHS trusts there are but surely it would make sense that most equipment could be purchased by one purchasing department and smaller, less frequent items could be purchased by individuals on a local basis who can easily shop around and get the best deal.

It's the same in Local Authorities. I recently had to travel to Yorkshire on business but because of the way the purchasing system works I had to book hotel rooms through a certain overnight hotel operator. The cost was £135 for two rooms for two people, I could have got similar type of rooms with a competitor for £69.

You have to admire the genius idea of outsourcing to India to save 'millions', great idea, relinquish control and place British nationals on welfare.

Edited January 3, 2011 by Mr. Miyagi

[Timak]

It is hilarious.

By far the best system would be a single centralised purchasing system for the NHS.

It could be open to any supplier to offer products/services to the NHS through this system.

In other words a free market whereby competition brings down prices.

However the mantra of "localism" and "choice" means that centralised systems are "a bad thing" so every single health area develops their own systems in isolation and we all lose money.

And as for sending it to India - please just shut up with such suggestions - UK tax payers money should be spent within the UK.

[SarahBell]

It is hilarious.

By far the best system would be a single centralised purchasing system for the NHS.

Not unless you want only huge companies bidding to supply products.

Give managers a % of what they save each year and see how much more cheap they'll find things.

[Timak]

Not unless you want only huge companies bidding to supply products.

Give managers a % of what they save each year and see how much more cheap they'll find things.

You missed off my next line which said "It could be open to any supplier to offer products/services to the NHS through this system"

e.g. anyone regardless of size.

You wouldn't need purchasing managers - it would just be like Amazon but only for the NHS.

[Bloo Loo]

OK guys, whats involved in a pair of Huntleigh flowtron boot?

I see its an inflatable bag that blows up, and down, and has a timer to vary the inflate and deflate.

cant see why this would be more than £30....but no, they pay £2000.

like a BPM from Boots..a bag, a sensor and a readout...was £9.99 over the counter,

now, wheres that bag of spare balloons.....

Edited January 3, 2011 by Bloo Loo

[@contradevian]

OK guys, whats involved in a pair of Huntleigh flowtron boot?

I thought that too. They are probably made in China for pennies too!

[Snugglybear]

When next a member of my family is ill after 5pm or on a weekend, I look forward to trying to explain to an operator to whom English is very much a second language what my loved one's symptoms are, and to attempting to comprehend the answer he or she will parrot from the computer system, and of course to the hilarious misunderstandings which will ensue.

[Kurt Barlow]

When next a member of my family is ill after 5pm or on a weekend, I look forward to trying to explain to an operator to whom English is very much a second language what my loved one's symptoms are, and to attempting to comprehend the answer he or she will parrot from the computer system, and of course to the hilarious misunderstandings which will ensue.

Hows that any different from what you would experience now?

[ChumpusRex]

OK guys, whats involved in a pair of Huntleigh flowtron boot?

These are essentially a pair of strap on knee-high boots.

They contain a series of balloons inside the lining, which are connected a series of hoses to a sophisticated pump/valve unit. The control unit inflates the balloons in a specific sequence so as to force blood out of the veins in the feet and calves, back up into the body.

This helps ensures that blood doesn't stagnate in the veins and clot (deep vein thrombosis) and are needed in paralysed or unconscious patients who are at high risk of getting DVTs.

They've also got special foam and silicone liners which are fully washable and disinfectable, pressure relieving (so that they don't cause pressure damage to the skin), etc.

All in all, a complex piece of equipment made from special materials.

In reality, the manufacturing cost is likely a small fraction of the purchase cost, but the relatively limited market, and the extortionately expensive licensing and bureaucracy needed to license a medical device probably eat the majority of the cost.

There are significant differences between this type of hospital equipment and home equipment - notably the build quality, extent of testing, certification of accuracy, ability to clean or decontaminate, etc. The abuse that hospital equipment gets is staggering, to the point that I'm amazed we don't have more problems with the devices malfunctioning.

Edited January 3, 2011 by ChumpusRex

[lulu]

I don't know how many NHS trusts there are but surely it would make sense that most equipment could be purchased by one purchasing department and smaller, less frequent items could be purchased by individuals on a local basis who can easily shop around and get the best deal.

Surely this is old news, in my old job we used similar supplies to those found across the NHS. When we asked companies for quotes the first they would produce we would reject outright as it was always for far too much. The second/thrid quotes were always much more competative. One of their sales reps admitted once that they pretty much had an 'NHS' price' and a regular price as more often than not the NHS were accepting just about any quotes.

Hopefully this has changed now but it I would not be surprised if it were endemic across the entire NHS/local authority spending especially for big ticket items.

[@contradevian]

When next a member of my family is ill after 5pm or on a weekend, I look forward to trying to explain to an operator to whom English is very much a second language what my loved one's symptoms are, and to attempting to comprehend the answer he or she will parrot from the computer system, and of course to the hilarious misunderstandings which will ensue.

Its only the back office/admin they wish to outsource. Not NHS Direct.

Maybe the solution is India as any UK solution would involve the likes of crony Crapita etc and would end up costing even more money for even worse service.

[Bloo Loo]

These are essentially a pair of strap on knee-high boots.

They contain a series of balloons inside the lining, which are connected a series of hoses to a sophisticated pump/valve unit. The control unit inflates the balloons in a specific sequence so as to force blood out of the veins in the feet and calves, back up into the body.

This helps ensures that blood doesn't stagnate in the veins and clot (deep vein thrombosis) and are needed in paralysed or unconscious patients who are at high risk of getting DVTs.

They've also got special foam and silicone liners which are fully washable and disinfectable, pressure relieving (so that they don't cause pressure damage to the skin), etc.

All in all, a complex piece of equipment made from special materials.

In reality, the manufacturing cost is likely a small fraction of the purchase cost, but the relatively limited market, and the extortionately expensive licensing and bureaucracy needed to license a medical device probably eat the majority of the cost.

Im sure Homemedics do something similar for £100.

so the special foam liners and stuff mean they are "Purchased" either for £2000 or £500. Heads need to roll.

and FDA approved:

http://www.verseo.com/verseo-cordless-air-pressure-leg-massager.html

Edited January 3, 2011 by Bloo Loo

[papag]

I know a director/owner of a company that supply rubber and plastic mouldings to the NHS that go around the corridors of hospitals in the south of the UK, they charge what they like and are never questioned by the trusts, this has made them and continues to do so very wealthy people ,and nothing has changed since the so called austerity cut backs

[Gone baby gone]

By far the best system would be a single centralised purchasing system for the NHS.

Yes, that works so well for the MOD.

What the NHS needs is less centralisation, but better collaboration and sharing of best practice between the individual units.

Edited January 3, 2011 by What's'isname

[Timak]

Yes, that works so well for the MOD.

What the NHS needs is less centralisation, but better collaboration and sharing of best practice between the individual units.

Centralised purchasing works for Tesco / Walmart and just about every other global business.

Just because it has been poorly done in government so far doesn't make it a bad idea.

[Gone baby gone]

Just because it has been poorly done in government so far doesn't make it a bad idea.

Why will centralised purchasing in government be "different this time"?

For centralised purchasing to work, the organisation (NHS) would have to be centralised. The NHS isn't one huge organisation, like Tesco or Walmart, it's actually a number of smaller organisations drawn together in something akin to a Federation.

[Bloo Loo]

Surely this is old news, in my old job we used similar supplies to those found across the NHS. When we asked companies for quotes the first they would produce we would reject outright as it was always for far too much. The second/thrid quotes were always much more competative. One of their sales reps admitted once that they pretty much had an 'NHS' price' and a regular price as more often than not the NHS were accepting just about any quotes.

Hopefully this has changed now but it I would not be surprised if it were endemic across the entire NHS/local authority spending especially for big ticket items.

it was old news when you first heard it, and it will be old news in 10 years time.

nobody wants to change anything in the NHS.

Thats why its "ringfenced".

cut salaries by 50% above 25K.

[dubsie]

What a load of utter rubbish, ok we off shore hospital administration..... But who employs these people. Bigger benefit bills is the result and lower tax receipts.

It's utter non-sense to start giving more jobs overseas. Where is this country heading to, what is going to

happen to the millions that will

lose their jobs.

[R K]

He also claimed that millions could be saved by outsourcing more NHS administration overseas to countries such as India.

Ah yes, here comes the 'rebalancing' of our economy to Dave's new bestest fwends.

So £1bn could be 'saved' i.e. cut from private sector income via sales to the NHS (good, good).

Or roughly only 1/7th of the money about to be stolen by banksters (again) from their taxpayer funded 'businesses'.

[Bloo Loo]

What a load of utter rubbish, ok we off shore hospital administration..... But who employs these people. Bigger benefit bills is the result and lower tax receipts.

It's utter non-sense to start giving more jobs overseas. Where is this country heading to, what is going to

happen to the millions that will

lose their jobs.

thats right.

Its time for trade barriers.

[easy2012]

My link

I don't know how many NHS trusts there are but surely it would make sense that most equipment could be purchased by one purchasing department and smaller, less frequent items could be purchased by individuals on a local basis who can easily shop around and get the best deal.

It's the same in Local Authorities. I recently had to travel to Yorkshire on business but because of the way the purchasing system works I had to book hotel rooms through a certain overnight hotel operator. The cost was £135 for two rooms for two people, I could have got similar type of rooms with a competitor for £69.

You have to admire the genius idea of outsourcing to India to save 'millions', great idea, relinquish control and place British nationals on welfare.

I looked at a NHS supplier account and they have 50% gross margin (and increased by a few % last year, during the credit crunch, while all the high street retailers see their margin under pressure).

It is good business supplying to NHS really, as tax payer, I just don't want to be paying for that...

[stormymonday_2011]

Not unless you want only huge companies bidding to supply products.

Give managers a % of what they save each year and see how much more cheap they'll find things.

My experience is government spending is best devolved to lowest possible local level with managers given fixed budgets and then allowed to use discretion .

Centralised government purchasing ususually leads to contracts mysteriously winding up with favoured suppliers at astounding cost

The outsourcing of the maintenance of government buildings to the likes of Mapeley ended up with simple lock replacements being charged at rates of upto £500 a throw

BTW the old India as cheap option is getting a bit dogeared these days with costs in Asia rising at a rate of knots.

The IT outsourcers are already desperately searching the globe for the next supply of code monkeys. Some are even recruiting UK graduates.

[Timak]

Why will centralised purchasing in government be "different this time"?

For centralised purchasing to work, the organisation (NHS) would have to be centralised. The NHS isn't one huge organisation, like Tesco or Walmart, it's actually a number of smaller organisations drawn together in something akin to a Federation.

It isn't difficult.

Just say "From 1st April the NHS can only purchase goods via this portal"

Say to suppliers "From the 1st April you will need to list your goods on this website with the prices"

[stormymonday_2011]

It isn't difficult.

Just say "From 1st April the NHS can only purchase goods via this portal"

Say to suppliers "From the 1st April you will need to list your goods on this website with the prices"

As the man said earlier there is no centralised NHS doing the buying.

Moreover, the government has abolished primary care trusts and is devolving budgets to GPs which will then buy treatment from particular hospitals so all purchasing decisions will be at hospital not even regional level.

[Bloo Loo]

As the man said earlier there is no centralised NHS doing the buying.

Moreover, the government has abolished primary care trusts and is devolving budgets to GPs which will then buy treatment from particular hospitals so all purchasing decisions will be at hospital not even regional level.

Ok so a dept decides to buy a boondoggle.

it appears they open the approved catalogue pick up the phone, give the order number and budget reference to the supplier...end of.

there appears to be little haggle or searching around. I guess everyone is too busy.

My personal anecdote comes from some years ago when we supplied Hard drives to the trade.

Our manufacturer was contacted by a government department and we were recommended. The supply was for 80Mb hard drives...price...around £200.

we made the usual margin on these, about 5%. orders came and went....prices dropped as they did, but the orders kept coming through at the first price, until the margin was about 60% and the line dropped out...

I rang to say that their latest order couldnt be completed as the product was obsolete....what could we supply....well, 212Mb drives....they assumed the price was going to be higher but I "pleased" them by offering them for only £10 more.

a check in any PC mag at the time would have shown retail suppliers doing them for about half.

I felt a little guilt about my commissions on these...but, its their system and the price is the price.

Edited January 3, 2011 by Bloo Loo