The Carter Report on NHS Efficiency – Directionally Strong, Some Surprising Lack of Detail

hospitalSo the Carter report on NHS efficiency was published last week, with coverage split between the price of toilet rolls (metaphorically and actually) and some commentary on inefficient staff rotas and the like. Our interest is in the former primarily, although we did find the staff side of things interesting, and as far as we can tell, there are improvements that some Trusts really need to make.

Carter has made it clear that he does not want this used as a blunt instrument to beat Trusts around the head with, and good for him for saying that. But politicians and NHS England may well want to use this aggressively - we are now getting into a long drawn out blame-game, as the NHS moves into financial crisis in the next couple of years (in our opinion).

As we and others have said before, according to the Five Year Forward View, the £8 billion extra money promised by government is only enough to maintain services if the NHS saves £22 billion, a rate of efficiency improvement that it has never achieved before. So Staff Agencies are the problem, or Trusts that don’t buy well, or people who go to A&E unnecessarily, or fat immigrants ... anyone but politicians, the Department of Health or NHS England, who between them control the news agenda pretty thoroughly. Expect all of this in the months ahead.

Anyway, back to the Carter report. “I think a further £3bn could be delivered from improved hospital pharmacy and medicines optimisation, estates and procurement management (£1bn from each) by adopting best practices and modern systems, for example, creating a tightly controlled single NHS electronic catalogue for products purchased by hospitals”, he says.

He wants to develop an “Adjusted Treatment Index” to allow hospitals to compare their performance with others, and be a baseline for future improvement, and he wants to have a “model hospital” to define what efficiency looks like.

One issue which we have not previously thought about much is the cost and effect of sales reps. “In one hospital, there were 650 sales reps targeting the hospital with 65 on site at any one time. Those sales forces not only have a big influence on choices made – they also have big costs that in the end we pay for”.

As well as literally controlling physical access of suppliers’ staff to hospitals, a “Sunshine Act” as the US has in place (disclosing financial relationships between suppliers and medical staff) might be the answer. Both of these sound like sensible moves, I guess I thought conflicts of interest were declared already but evidently not!

Carter also wants to have a single electronic catalogue, with a tightly controlled product list, unlike the NHS Supplies catalogue that contains thousands and thousands of options. I can’t argue with that, but the Department of Health’s record on developing anything technological (in-house or commissioning software development) is dreadful so we will have to see how that goes.

Surprisingly, there is a lack of detailed price comparisons in the report – I expected some sort of appendix (not the thing they remove in hospitals, ha ha) with lots of numbers. We hear that the spend data gathering exercise was not very successful, which may explain that gap. Whilst we all know how tricky the process can be when there are multiple organisations involved, all with different systems and records, there is a bit of a mystery about the firm chosen to do what was essentially a spend analytics programme. We’re looking into that to see what we can discover.

So although the data may be poor, it is hard to argue with the conclusions. We must be careful not to close down markets and stifle innovation by too much centralisation; but it does seem likely that the NHS could save a lot of money by taking a more structured, collaborative and consolidated approach to procurement. Which makes the closing down of PASA in 2010 look more and more like a major disaster – I would still love to know exactly how and why that happened. Whilst Peter Coates did some good things as Commercial Director in DH, that happened on his watch and it now looks like a truly bad decision.

The other elephant in the room is the whole structure of Trusts and the moves through the last two Labour and Tory governments to encourage competition between hospitals. It is hard to design successful procurement strategies that are not aligned with wider business strategies, yet in a sense that is what Carter wants to happen. It’s clear Simon Stephens (NHS England supremo) is not enamoured of the current set-up, yet a whole structure around commissioning and competition has been set up. That may need to be formally dismantled if the new world of the NHS is much more about collaboration and learning between Trusts, in procurement and indeed other areas.

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Voices (4)

  1. Allison Ford-Langstaff:

    There is so much opportunity here and it doesn’t have to be as difficult. The problem with trying to eat an elephant is that you rarely can and besides the NHS is not 1 elephant, it is lots of elephants. To make change really effective Lord Carter and the team need to recognise this and set up lots of programmes tailored to each Trust.

    1. Sam Unkim:

      How can they move forward with “lots of programs ” until they have had some success somewhere ?

      It’s going to be very difficult to tailor this to each Trust, when even Lord Carter is frustrated that he still cannot drill down into the data from his pacesetter cohort – with only 18% of accounts payable and purchase order data being matched…

      But of course, if you are just proposing a “feeding frenzy of consultants” dropped haphazardly into Trust’s across the country and hoping it does some good, then that’s hardly a change from the last 20 years is it?

  2. Sam.Unkim:

    Re: NHS Supplies catalogue that contains thousands and thousands

    Should read “Hundreds of thousands”



  3. David Lawson:

    The focus on efficiency is a positive step forward. Supply chain/ Inventory opportunity is mentioned although unclear if the scale of the issue is fully understood. Industry is mentioned but as a negative in terms of price variation/ sales reps rather than the positive potential to help hospitals improve by for example applying lean techniques developed over many years to patient pathways. The importance of hospitals needing to invest in Procurement is welcome but the absence of initiatives to support capability building such as the previously suggested Academy remain a lost opportunity.

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