A five-point plan to save the NHS millions

5 November 2013

The NHS is often criticised heavily for the way it buys its supplies, but it has recently announced the launch of a price comparison website aimed at helping the health service save millions of pounds in the way it purchases goods and services.

Although this goes some way towards helping reduce the chronic overspending that has taken place in the NHS for many years, my experience of working with NHS foundation trusts makes me think that this latest cost-cutting initiative will only go skin deep. Plans to join up NHS spending data through a price index, showing up to 50 per cent variance in what is paid by trusts for many products, does not provide urgently needed change. County Durham and Darlington NHS Foundation Trust (CDDFT), which looks after the healthcare needs of more than 600,000 patients, has achieved this by overhauling purchasing, eradicating wasteful purchasing and simplifying its purchasing processes for thousands of staff. Based on this success, we have outlined the following five-point plan to realise spending efficiencies throughout the health service:
  1. Evaluate national buying power. Rather than highlight price differences, evaluate national buying potential in common spend areas like swabs and sutures to redefine prices.
  2. Segment strategy with 80:20 rule. Areas of little impact to health provision such as utilities, catering and office supplies represent around 20 per cent of all NHS expenditure, but 80 per cent of the savings potential.
  3. Massively reduce product choice. How many different types of pens, pencils and thousands of other standard items do the health service need? Money can be saved by massively standardising choice.
  4. Build an NHS ‘shopping platform’. Ensure people buy the right product at the right price by building a single, simple online shopping system based on national contracts for common products across the entire health sector.
  5. Give national responsibilities to regional category experts. The NHS is well equipped with procurement experts; look at who is achieving value in different spending categories and give them national responsibilities.
Information is a vital part of the triage needed to understand the seriousness of NHS spending issues, but preventing further wastage requires culture change, a strategy to set contracts at the right level and ensuring buying is made easier for all. ☛ Daniel Ball is director at Wax Digital
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