Hospitals 'wasting £500m a year'

Hospitals are wasting at least £500m each year through failures in how they buy basic supplies, a highly critical report said today.

A study by the National Audit Office (NAO) found some hospitals are paying 50 per cent more than others for the same medical equipment and even uncovered big differences within NHS trusts which bought many different types of the same product.

It found hospitals purchased 21 different types of A4 paper, 652 types of medical gloves and 1,751 different cannulas, used for withdrawing or inserting fluid in patients. One hospital bought 13 different types of glove but another bought a staggering 177.

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The average variation between the highest and lowest price paid was around 10 per cent but was more than 50 per cent for more than 5,000 products.

The report uncovered unnecessary administrative costs due to multiple small purchase orders, with 60 trusts making more than 1,000 orders each per year for A4 paper – equivalent to at least four each working day.

It urged hospitals to work together to achieve savings although this goes against the direction of landmark Government reforms to the NHS which will lead to more competition.

These are being implemented at a time of unprecedented era of austerity in the NHS which has been ordered to save 20bn by 2015, with hospitals under the biggest pressure to save cash.

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The chairman of the MPs' Public Accounts Committee, Margaret Hodge, said the 500m savings could be achieved without any impact on frontline care.

"It is simply unacceptable that so many hospital trusts are currently paying more than they need for basic supplies," she said.

"The range of similar products that trusts buy is sometimes so wide as to appear ridiculous – how can it be that while one trust does its work with just 13 different types of surgical glove, another requires 177?

"These are well known recipes for poor value for money that really ought to have been addressed by now."

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The head of health for the public sector union Unison, Karen Jennings, said: "It is disgraceful that trusts are cutting staff when they could be cutting the cost of basic supplies. The Department of Health should be looking at maximising cooperation instead of promoting competition in our health service to make sure taxpayers get value for money."

Health Secretary Andrew Lansley said: "The more efficient the NHS becomes, the more we can invest back into patient care.

"That is why it's so important for hospitals to deal with wasteful procurement.

"While it is up to local hospitals to decide how they purchase products, Government has a role in providing support and robust information.

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"We are considering launching a review to help hospitals get

better value for money from procurement drawing on the expertise of Government advisers."

The NAO report said some NHS trusts had saved huge sums.

Hospitals in Sheffield had made a 38 per cent saving, amounting

to nearly 200,000 a year, by moving from six brands of examination gloves to using one supplier.

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Managers at the Doncaster and Bassetlaw trust saved 150,000 – half of the annual cost of the 23,000 items of clothing it needs each year – by sourcing garments from three firms instead of 10.

The Sheffield-based NHS Collaborative Purchasing Consortium said it had saved 18m through procurement involving 50 NHS trusts in the region in 2010-11.

One two-year deal involving 15 foundation trusts had saved 500,000 on a contract for food products fed directly into the stomach.

A spokesman said: "The benefits of working collaboratively to procure are clear and demonstrable through streamlining administrative processes and harnessing the buying power of the region's trusts."