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NHS cash crisis: can smarter procurement help?

27 Sep 2011 12:00 AM | Anonymous

NHS Confederation CEO Mike Farrar yesterday warned Ministers that “the NHS's cash crisis is so great that it will have to either cut services to patients or close accident and emergency and maternity units if it is to avoid going bust”. The need to make £20bn of efficiency savings by 2015 "means our finances are under more strain than ever", he says.

£1.2bn of those savings are expected to come from the hospital procurement budget. However, a National Audit Office (NAO) report has found that there is a significant lack of standardisation and bulk buying by NHS trusts, with prices for identical items varying by some 50%. And this issue is only likely to get worse, as by 2014 nearly all hospitals will be run as independent foundation trusts, leaving ministers with little direct control over their spending priorities.

A consistent basis for measuring performance, whilst still giving trusts autonomy to make their own decision, is required.

The NHS problems remain under the spotlight, as an appendix to a Department of Health document has revealed that the cost of the government’s NHS reforms could outweigh the savings made by cutting large numbers of administrators.

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