The NHS in England could save £5billion a year by improving staff organisation and the way it buys goods and medicines, according to a new review.
Lord Carter, who was asked by Health Secretary Jeremy Hunt last year to conduct the review, came to the conclusion that the savings were realistic after spending a year working with 22 hospital trusts on behalf of the Government.
Leeds Teaching Hospitals NHS Trust and Mid Yorkshire Hospitals NHS Trust were the only two Yorkshire representatives in a review that found huge variations in the costs of medicines, other products and bills like heating.
Lord Carter also identified huge inefficiencies in the way that staff were managed, with one hospital losing £10,000 a month through workers claiming too much leave.
The report, which is yet to be published in full, says hospitals need to make better use of staff through flexible working and better rostering as the £45.3bn pay bill was the NHS’ largest area of spending in 2013/14.
“The NHS has some of the best hospitals in the world both in terms of quality, innovation and operational efficiency,” Lord Carter said.
“The challenge is to lift hospital efficiency to a consistently high standard in every area of every NHS hospital and, where we already perform well, innovate to improve further.”
Of the savings earmarked, £2bn could come from improving the way rosters are run and making sure non-productive time like training and annual leave is better managed. Lord Carter also estimates that £1bn could also be saved from respective bills for medicines, estates and procurement of everyday goods.
Part of his plans include a method of measuring hospitals’ productivity, named the Adjusted Treatment Index, which would allow hospitals to make direct comparisons with each other.
It will focus on four major spending areas: workforce, medicines, estates management and procurement, and account for hospitals’ sizes and locations.
Lord Carter said: “I do not think there is one single action we can take but I do believe there are significant benefits to be gained by helping hospitals, using comparative data, to become more productive.”
The interim review, released yesterday, highlights individual cases of waste such as at a Bolton NHS Foundation Trust hospital where the soluble version of a steroid was being used at £1.50 per tablet, when it could have been paying 2p for the solid version. By saving the soluble version only for children and patients who have trouble swallowing, it is saving £40,000 a year.
The review also found that the NHS uses 500,000 different lines of everyday items with the price between similar goods varying by over 35 per cent.
Last week Mr Hunt described Lord Carter’s findings as “staggering” as he spoke of a huge variation that leaves some hospitals paying more than twice as much as others for items like toilet roll.
Mr Hunt said he wanted to see hospitals “cutting out the waste and making sure every penny counts so that the quality of care continues to improve”.
Following the publication of his full report, Lord Carter will produce a template for an efficient “model hospital” during the summer and will then set out saving recommendations for each hospital with the Department of Health.