The latest company news from NHS Supply Chain

Company news

£29.5m savings through the Department of Health Capital Equipment Fund

NHS Supply Chain saves £29.5 million on Capital Equipment

£29.5m1 savings could equate to 960 band 6 radiographers2 for the NHS

Wednesday 1 October 2014

In 2011, the Public Accounts Committee and the National Audit Office both raised concerns regarding the NHS’s fragmented approach to buying/procuring high value capital equipment. With the NHS spending approximately £500m per year on capital equipment, the potential for savings was considerable.

In response, NHS Supply Chain joined the Department of Health (DH) and NHS Business Services (NHS BSA) to develop a unified and systematic purchasing process for NHS capital equipment. This led to the launch of the Capital Equipment Fund in March 2012, which is enabling bulk purchasing of capital equipment to make the best possible use of the NHS’ buying power.

The fund is managed by NHS Supply Chain, with DH and NHS BSA contributing to the strict governance and oversight process.

The Fund’s purpose:

  • Driving better value for money in planning, purchasing and maintenance of capital medical equipment in the NHS
  • Creating savings by achieving discounts on the previous purchase price of high value assets being bought by the NHS
  • Covering a significant proportion of annual relevant NHS expenditure (£650m)
  • Maintaining a manageable risk profile for the NHS.

Performance of the Fund

Since April 2012, the fund has enabled £345.5m to be committed in 90 bulk buys with 29 suppliers, covering 24 different diagnostic and cancer treatment options/types, including CT, MRI and Linear Accelerators.

Results to end of August 2014:

  • Generated £29.5m1 in incremental savings across 211 NHS trusts and 2,433 units
  • Achieved attributable savings to the NHS of 13.4% over the last two years
  • £29.5m1 savings could equate to 960 band 6 radiographers2 for the NHS.

Top 10 NHS organisations using the Fund:

TrustTotal Savings (£)QuantityTypesSaving (%)
The Newcastle Upon Tyne Hospitals NHS FT £1,026,095.56 29 16 13%
Royal Surrey County Hospital NHS FT £812,025.87 16 5 14%
Brighton And Sussex University Hospitals NHS Trust £729,376.57 33 10 12%
United Lincolnshire Hospitals NHS Trust £721,708.27 18 11 11%
Imperial College Healthcare NHS Trust £645,930.69 53 24 9%
Cambridge University Hospitals NHS FT £641,526.63 17 15 8%
Lancashire Teaching Hospitals NHS FT £578,474.29 42 17 8%
South Devon Healthcare NHS FT £571,198.78 29 15 9%
Hampshire Hospitals NHS FT £514,949.84 15 11 7%
The Royal Marsden NHS FT £507,910.00 17 14 5%
Grand Total £6,749,196.51 269 138 9%


Find out what these savings mean for your organisation

The continuing challenge

Whilst the NHS has improved its overall performance in purchasing capital equipment, there remains considerable room for improvement in trusts’ uptake of the offering for certain equipment, particularly MRI and CT scanners. Currently, the average saving per trust using NHS Supply Chain stands at £140,000.

NHS Supply Chain has been extremely successful in obtaining substantial price reductions across a variety of capital equipment types. However, trusts are still not purchasing enough of these types of equipment to replace existing assets known to have reached the end of their useful economic and clinical life.

Key issues highlighted by trusts are their capital planning cycles and the need to retain cash within trust for performance measurement, along with the high cost of the assets. Exacerbating this situation is the sizeable proportion of equipment that is ageing, giving trusts real difficulties in deciding what to replace each year with limited funds.

Asset management solutions

To address these difficulties, NHS Supply Chain has developed its own asset management solutions covering planning, asset ownership, asset financing and asset disposal to aid trusts in making better informed decisions. These solutions can help the NHS and individual trusts deliver healthcare and productivity benefits whilst improve patient outcomes at lower costs to sustainably meet future healthcare needs. What is required is the governance framework to implement them. They are also actively looking at how a system of loans and managed equipment services may help care providers to reduce the costs of changing equipment.

Want to know more about asset management?

  • asset management white arrow

Information

To find out more about working with the NHS Supply Chain Capital Solutions Team, contact your Capital Regional Account Manager, or call the team on 0113 385 4800.

Footnotes

1 The £29.5m savings quoted are based on commitment from Trusts, not completed transactions and are additional to those achieved as a result of the tendering process for the national framework. The additional savings are calculated as the actual discount against the national framework price for individual products. It is important to note that the savings which appear in the Trust Savings Reports are those where the transaction has been completed. The period for the £29.5m savings, was March 2012 to August 2014.

2 Based on point 26 for band 6 radiographers, using NHS Agenda for Change payscales at http://www.nhscareers.nhs.uk/explore-by-career/allied-health-professions/pay-and-benefits-for-ahp-staff/

Delivering value to the NHS