Earlier this week Jeremy Hunt appeared on the BBC and claimed that a new central list for hospital supplies will save £500 million per year and that NHS reforms are already saving £1,000 million per year. Are these figures true?
In 2011 the National Audit Office (NAO) reported that £500 million of annual savings could be made by NHS acute and foundation trusts on procurement of standard items. The press notice cited the huge variation in the prices and variety of surgical gloves as an example. So his claim is true, although recycled… and three years old at that.
It’s important that they buy products of decent quality. The costs of surgical gloves splitting (infection risk, panic…) are far likely to exceed the costs of stocking decent gloves. So they should buy something that offers good value for money – good quality but at a decent price, rather than going for the cheapest automatically. In any case there is probably scope to reduce the 652 varieties of gloves that they currently buy!
The article also mentions that the NHS will centrally negotiate with suppliers, using its scale to “drive a harder bargain”. Again, the NAO mentioned that this should happen back in 2011. There is already an outfit for centralised procurement, called NHS Supply Chain, but trusts don’t have to use them. As is the case with so many public services, it isn’t run in-house but by DHL, who are better known for being parcel couriers. Jeremy Hunt’s suggestion seems to be reasonable, but again is just recycled from what the NAO said three years ago.
The article closes with comments on NHS restructuring, and how lots of administrative jobs have been cut in order to pay for doctors. Again, borrowing from the NAO’s work on managing the transition to the reformed health system, published last year, 170 organisations (mostly primary care trusts) were closed. But these were replaced by 240 new organisations (mostly clinical commissioning groups, or CCGs). Thousands of staff made redundant were re-hired after average payouts of £43,000, rather than the cheaper option of being transferred.
What he hasn’t costed is that the GP-led CCGs are taking expensive and difficult to train doctors away from patient care. GPs are being put into management positions, potentially without management experience (things like finance, HR, law, contract monitoring). These “opportunity costs” (such as seeing not patients) don’t seem to have been costed. The NAO’s team couldn’t confirm the Department of Health’s claimed savings figures. So the jury is out on Jeremy Hunt’s claim of £1 billion in annual NHS reform savings.
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Hat-tip to “HR” for sending me a link to the BBC article. Image attribution: public domain, defenseimagery.mil