NHS hospitals are to be ranked according to how much they are spending on procuring goods and services, according to the health secretary Jeremy Hunt.
The Department of Health (DoH) said the new procurement league table is an attempt to reduce how much the NHS is charged by suppliers and help save up to £300m a year.
It added that the table would rank trusts based on the efficiency of their procurement.
Announcing the initiative at the NHS Providers conference in Birmingham, Hunt said the NHS was a very efficient service but there was no room for complacency.
“There is still baffling variation in the prices that hospitals are paying for supplies, with many paying over the odds for the same products sold more cheaply at a neighbouring trust,” he said.
“We want to support the NHS to save money wherever possible so it can be reinvested into frontline services, making sure taxpayers get the best value from the government’s investment in the NHS.”
The DoH noted that since 2015, the NHS had saved hundreds of thousands by improving the way it buys goods and services.
However, it added that despite ongoing efforts to secure procurement efficiencies, there was still wide variation in prices paid, with some trusts paying more than double for items like surgical scalpels.
The department cited instances where prices paid for a single pack of 12 rubber gloves varied from 35p to £16.47, while the cost of hip implant went from £761 to £3,669.
Currently, each trust negotiates directly with suppliers to buy goods and services. As most purchasing decisions happen at trust level, individual hospital trusts are not able to leverage the massive scale of the NHS and negotiate the best deals on price and quality.
Hunt said the league table was created after the DoH set up the Purchase Price Index and Benchmarking (PPIB) tool, which showed how much each trust was spending on similar goods and services.
“We set up the PPI, which allowed NHS leaders to see in real time the prices that you are your colleague organisations are playing and we are discovering, for example, you could have two trusts next door to each other and when it comes to a box of 100 syringes, one trust will be paying £12 and next door they are only paying £4,” he said.
Hunt added that three trusts—Leeds, University College Hospital and Addenbrooke’s—could achieve £10m of savings by adopting best procurement practices.
“Nearly every trust has multi-million pound savings they could make,” he said.
The DoH said that in the future, the NHS would be able to “flex its enormous buying power” through an improved NHS Supply Chain, replacing the hundreds of individual supplier relationships.
The procurement league table follows a report on variation in the NHS by Lord Carter published two years ago, which challenged the NHS to save £700m through better procurement.
The report highlighted that, while £30bn a year was spent by the NHS on suppliers, prices paid by different hospitals to suppliers varied starkly.
The DoH said the league table would be made available on the My NHS platform and on NHS Improvement’s Model Hospital—an information service to help providers improve their productivity, quality and efficiency.
NHS Trust procurement league table top 5:
Wrightington, Wigan and Leigh NHS Foundation Trust
University Hospitals Coventry and Warwickshire NHS Trust
Bradford Teaching Hospitals NHS Foundation Trust
Central Manchester University Hospitals NHS Foundation Trust
University Hospitals of Morecambe Bay NHS Foundation Trust
1. Wrightington, Wigan and Leigh NHS Foundation Trust
2. University Hospitals Coventry and Warwickshire NHS Trust
3. Bradford Teaching Hospitals NHS Foundation Trust
4. Central Manchester University Hospitals NHS Foundation Trust
5. University Hospitals of Morecambe Bay NHS Foundation Trust
☛ Want to stay up to date with the news? Sign up to our daily bulletin.