NHS Hospitals – Trains, Buying Pains and League Tables

NHS hospitals are now ranked in a league table based on how much they spend on commonly bought items. The Health Minister Jeremy Hunt said, “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”.

“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.”

NHS Improvement says there is still wide variation in prices paid, with some trusts paying more than double the norm for items like surgical scalpels. For instance, prices paid for a single pack of 12 rubber gloves can vary from 35p to £16.47, while the cost of a hip implant ranges from £761 to £3,669 according to the data.

League tables – well, this should be fun. When this was tried before to some extent in 2014, there were issues that really made the whole exercise pretty worthless. The prices all came from items bought from NHS Supply Chain for a start, which made a bit of a mockery of the whole exercise.

Our article we published at the time from a health practitioner pointed out for instance:

  • Hertfordshire Community Trust are according to the data “best in class” at buying surgeons’ gloves. But in fact they ordered a whole pallet load in error, as they don’t actually do surgery.
  • The Plymouth team were stood on the naughty step for ordering a single sling at £28.20, but they actually buy boat-loads from another source at some £5 lower than the supposed “best in class” in the analysis.

Will this time round be any better? Well, the process behind it is certainly more complex this time round. It looks like prices from different suppliers are taken into account in the analysis, but we’re not clear whether any account has been taken of variations in specification, ordering quantities, or logistics issues.

So far, NHSI has published this explanation of how the tables are constructed. It is very complicated, even for a Maths graduate, so we can’t claim to have got to the bottom of this yet. And we finally tracked down the actual table, which is here.  Procurement_League_table

What is clear from the guide is that there is a lot of extrapolation of savings from a relatively small basket of products and pricing. And we haven’t worked out how the final position in the table is determined – how can a Trust that “meets expectation” on the two core factors (“procurement process efficiency” and “price performance”) be ranked above another that “exceeds expectation” on one factor and meets the other?

If you are near the bottom of the table, we’d be very happy to speak off the record and get your explanation if you don’t think the ranking is fair. We’re not necessarily against the idea of “naming and shaming” organisations that don’t perform, but it must be based on accurate data. Otherwise it is not just unfair, but counter-productive.

To finish on a more light-hearted note, Public Finance website published an article about this topic which initially said this.

“Currently trusts strike individual agreements with suppliers, however, they will soon be able to join a national NHS Supply Train to take advantage of aggregated buying power and negotiate best deals on price and quality”.

We love the idea of an NHS Supply Train!! But is it a high-speed bullet train or a clapped out old diesel, wheezing its way between run-down stations? We will see.

Unfortunately, the website corrected the error once we Tweeted it. Wish I'd done a screen grab ... And I'm sure we will have more on the league tables shortly.

 

 

Voices (4)

  1. bitter and twisted:

    The precision of the figures is quite interesting,

    Wrightington, Wigan and Leigh NHS Foundation Trust – Estimated savings target (lower level) – “£ 672694.057650001”

  2. Been Round The Block A Few Times.:

    As much as I agree with all of the points made over the last 7 days on this subject the “price” issue wont go away in a hurry so we better get used to it.

  3. Bill Atthetill:

    Looks like Hunt has simply replaced the (alleged) skirt-lifter for wanting to grab a few headlines. First it was the farcical Atlas of Variation, now this. If they need to publish a table publicly then it needs to contain complete, accurate data. This just puts the Department of Health in a very poor light. It will distract procurement teams from adding any strategic value by compelling them to beat up their suppliers over a few quid. I do feel sorry for all the supplier commercial and sales teams, especially in the top 10% of “volume” suppliers – they are going to be bombarded by requests as they are put in the cross-hairs of any tactical FD. On and up….

  4. Mr Grumpy:

    NHS Supply Train? Sounds like it will be every bit as useless as Southern Trains!

    There is this ambition it seems to have the entire NHS pay just one price for one item and make that uniform. I appreciate the rather drastic variations in price currently across the NHS, but most procurement functions in these NHS organisations will always strive for a better deal than one proposed by consortia silos. It’s what I’d expect any procurement function worth it’s salt to do.

    This constant banging of the price per item drum the DOH and NHSI keeps banging. I really wish that was the only challenge NHS procurement was facing!

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