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Compare the (medical) market.com? NHS comparison website announced

Elliot Bidgood, 6 August 2013

It was reported yesterday that the NHS is to set up an internal price comparison website for procurement (“designed on the price comparison websites that the public use for things such as energy and insurance quotes”), which will keep track of what trusts are paying for everyday medical supplies and for services such as construction. Currently there is wide variance – Ernst & Young reported that an identical pair of forceps could cost £13 or £23, for example – and the National Audit Office (NAO) reported in February 2011 that the NHS loses £500 million a year due to a lack of coordination in the procurement process. Meanwhile, the Department of Health claims its new plans could even save £1.5 billion. Either way, this represents a big chunk of the NHS’s £18 billion procurement budget and at a time of intense belt-tightening across the service, creating the new site is a valuable move.

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“E-procurement” of this kind is becoming increasingly important in health, as Western health services seek to square the circle of securing all of the many resources and services a hospital needs in a manner that is still cost-efficient. Last year the website Spend Matters UK reported that a private start-up website, Peto, was offering price comparisons for suppliers and buyers in the NHS, to some extent in competition with the catalogue provided by NHS Supply Chain, the health service’s joint venture with DHL Express. Spend Matters also warned that without improvement in NHS procurement, “the UK will remain a high price market compared to Germany or France due [to] the lack of any purchasing organisation within the NHS”.

Another online magazine specialising in logistics, Supply Chain Europe, has also warned that one of the challenges for the NHS is a “lack of contract compliance”, wherein NHS procurement staff making day-to-day decisions at times don’t fully comply with the deals originally negotiated by their purchasing teams, and that fuller use of today’s “Amazon-like online procurement tools” could simplify compliant buying and allow savings of 20%.

It was also reported that along with the new site, the government will appoint a private sector-trained NHS ‘procurement champion’ to oversee the new cost-savings drive, another interesting move.

I’d further note the importance of the NAO’s previous recommendation that trusts group and buy collaboratively, especially as the local trust-based and increasingly competitive structure of the NHS places limitations on the Department of Health’s ability to enforce savings in procurement. In Germany, for example, the formation of purchasing associations has saved hospitals €4 billion a year and allowed savings of 15%-20% compared to neighbouring countries.

It seems that through technology, innovation and new practices, procurement may be one area where there is room for our NHS to make valuable savings without harming patient care.

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