DH aims to save £500 million with NHS procurement list

Will Green is news editor of Supply Management
29 April 2014

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29 April 2014 | Will Green

A central procurement list where everyday NHS supplies can be bought in bulk is expected to save "roughly" £500 million.

The NHS Core List - to be overseen by a procurement tsar -  will replace the current model where hospitals negotiate prices individually and “as a result cannot always secure the best price for products”.

The Department of Health (DH) said it is aiming to making procurement savings of “£1.5 billion to £2 billion” by 2015/16 and the Core List would make up “roughly a third” of overall savings.

Health secretary Jeremy Hunt told The Andrew Marr Show on BBC One: “Hospitals pay too much for some of the basic products and services. That drives them mad. And so we’re announcing a big new scheme to improve NHS procurement – a central list that we can use the bulk-buying power the NHS has.”

In addition SRM guidance is being issued to NHS organisations around keeping prices down by meeting suppliers and applying global barcodes to all supplies to avoid the need for “costly human invoicing”.

The DH said the list would “drive out variation and secure better prices” with the NHS negotiating centrally and using its scale to “drive a harder bargain”. Trusts would then “shop for what they need from the list”.

A spokesman said: “For example, the NHS spends £25 million on sterile surgeon's gloves, with one brand the dominant market leader. We know that if trusts moved to an alternative brand they could save up to 38 per cent on the prices they currently pay. Some private sector hospital chains have switched brands wholesale and achieved this so we know it can be done. If the NHS negotiated with this alternative provider for a good deal on the gloves, and trusts then used the list price, more than £5 million could be saved in this product category alone.

“We are working with the NHS Trust Development Authority to ensure all NHS trusts will use the list and are developing incentive schemes with Monitor to encourage foundation trusts to do the same.

“A procurement tsar will be appointed by the government to produce the procurement list and drive this work forward.”

 

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