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NHS trusts ‘paying over the odds’ for supplies

19 November 2012

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Price variation is “worsening” between NHS trusts, costing £500m a year.

An analysis published by Ernst & Young estimated price variations for ‘everyday’ supplies in the NHS could cost a further “unnecessary” £1bn over the next two years unless procurement processes are reformed.

Data from 10 NHS trusts show the same box of medical forceps is purchased for £13 in some areas with other trusts paying up to £23 for the same supplies.

Some NHS trusts have also been found to pay over twice (164%) the average price (£60) for essential items like warming blankets and £1,109 for knee implants when the average price paid stands at £787.

The findings come two years after the National Audit Office (NAO) and the Foundation Trust Network noted “significant” variations in the prices paid by different NHS trusts for the same products.

Ernst and Young claim cost-efficient buying across the NHS “has not improved”, despite this warning.

In fact, it is said that the degree of variation has “worsened”.

Across 11 ‘everyday’ products reviewed in the report, the variation between the minimum and average price has increased from 18% to 20%.

Joe Stringer, partner at Ernst & Young, said a “lack of transparency” in the NHS market lies at the root of the problem.

“This [lack of transparency] is leaving trusts unable to make cost-efficient decisions about purchasing supplies,” he said.

“There is a widespread misconception that price disparity is the inevitable consequence of policy decisions to encourage competition between NHS providers.  With the NHS facing sustained pressure to contain rising costs and demand within a flat budget, transparency must be introduced across the board.  The consequences of inaction in the back office will only be felt more acutely in frontline care. ”

Julian Trent, managing director of price comparison site Peto, said price visibility will reduce costs and “generate an opportunity for product suppliers and the NHS alike to deliver maximum value for the public purse”.