Hospitals 'wasting 500m a year' by overpaying for basic items

National Audit Office report says parts of NHS are failing to use organisation's clout to get better prices

Hospitals are wasting at least 500m a year of NHS funding because some are paying more than twice as much as others for basic supplies such as paper, gloves and medical devices.

That is the conclusion of an inquiry published today by the National Audit Office (NAO), which aims to get the best value for money possible across all government spending.

"A combination of inadequate information and fragmented purchasing means that NHS hospitals' procurement of consumables is poor value for money," the report says.

"We estimate that at least 10% or around 500m of 4.6bn total NHS consumables expenditure, could be saved, and potentially much more for some products."

It blames the situation on the NHS's failure to use its clout to get better prices and the fact that many hospitals are now foundation trusts, which are semi-independent of Whitehall a process which will soon accelerate as a direct result of the coalition's controversial NHS restructuring. Health Secretary Andrew Lansley plans to force all 165 hospital trusts to have acquired that status by 2014.

Trusts often pay more than necessary for basic supplies, the NAO found when it analysed purchasing of 66,000 products.

While the average price difference between those who paid the highest and lowest was 10%, for 5,000 products it was 50%.

And for some of the items bought most often, it was more than 100%. Each trust could save an average 900,000 annually by buying the same items at the lowest available price, the NAO said.

The 61 trusts examined bought 21 different types of A4 paper, 652 different types of surgical gloves and 1,751 different cannulas.

While one trust bought 13 different types of glove, another bought 177 types.

The NAO urged greater standardisation, citing Doncaster and Bassetlaw hospitals' success in reducing the cost of the 23,000 items of nurses' clothi! ng it bo ught every year from 300,000 to 148,000 by reducing choice.

Despite hospitals' individual freedom to buy their own supplies, "the scale of the potential savings which the NHS is currently failing to capture [means] it is important to find effective ways to hold trusts directly to account to parliament for their procurement practices", the NAO said.

Lansley criticised "wasteful procurement" by hospitals and stressed that the more efficient the NHS became, the more money would be available for patient care.

"We are therefore considering launching a review to help hospitals get better value for money from procurement, drawing on the advice of government advisers," he said.


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