Health service 'wastes millions in different prices for supplies'

John Neilson, managing director of NHS Shared Business Services (NHS SBS), said cash was being needlessly squandered by health trusts who were paying several different prices for identical pieces of equipment and supplies – ranging from stationery to surgical instruments.

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

The health chief made the claims in an interview with the Times newspaper yesterday.

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 per purchase.

He also warned that a host of other equipment such as computers were being bought at needlessly high prices – wasting around 12 per cent of the NHS's purchasing budget.

Mr Neilson said that culprits of wasteful spending ranged from family doctors to elite foundation hospitals.

Trusts across the country were also buying a "bewildering" amount of different equipment to do the same jobs, he said.

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

Mr Neilson said: "If you talk about 12 per cent of that, it takes us into the low billions.

"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, 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 has claimed that vast amounts of money could be saved if health managers worked together to standardise equipment and exploit the bulk buying power of the NHS.

He added: "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 20bn 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.

Mr Neilson said that it was only the potential controversy involved which has prevented medical records and the handling of booking appointments being transferred overseas.

"There isn't a capability issue, there's more a local UK sensitivity issue," he added.

He said that people must recognise there is a tension between demanding efficiency in NHS spending and objecting to some of its services being outsourced to other countries in order to save money.

NHS SBS is a joint public-private venture set up in 2005 to get 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 31bn annually.

NHS SBS has four bases across the country including Phoenix House in Tingley, near Wakefield.

A Department of Health spokesperson said NHS SBS initiatives had so far delivered savings of over 50m – which had then been reinvested into frontline services and patient care.

The spokesman added: "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."