Health: ‘Fear and hope from £5bn NHS savings plan’

Picture by Dominic Lipinski/ PA Wire.
Picture by Dominic Lipinski/ PA Wire.
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UK residents are proud of the NHS and fear its core values may be under threat by cuts.

So plans to shave £5billion a year from its bills in England by 2020 through “cutting waste” seem optimistic and ambitious, especially following a period of austerity in which everybody has been cutting their cloth.

This week’s release of the interim review by Lord Carter, who was asked to analyse NHS spending by Health Secretary Jeremy Hunt, suggests a lack of standardisation has long been a major shortcoming.

After spending a year with 22 NHS hospital trusts on behalf of the Government, Lord Carter has identified huge inefficiencies in the cost of medicines and every day goods and estate services between hospitals – a trio of issues he claims can cut £1bn each from the national bill, while the rest of the savings are to be made by managing staff rosters better.

The lack of standardised purchasing, where for example hip operations have been costing some parts of the NHS double than others, seems an obvious flaw but, as the likes of the Nuffield Trust have already stated, finding the problem is the easy part.

Once the full review is published, Lord Carter will set each trust a target saving using a new Adjusted Treatment Index based on spending on workforce, medicines, estates management and procurement, that will also account for hospital sizes and locations. He will also publish a template for an efficient “model hospital”.

And although the review is not being dressed up as a one-stop cure for NHS spending, the very idea that trusts are going to be dished out ambitious savings targets despite years of frugality will surely strike both fear and hope into trust bosses.

During Lord Carter’s review he found one hospital could save up to £750,000 a year by improving the way it dealt with staff rosters, annual leave, sickness and flexible working – this regained the £10,000 a month the hospital was losing due to people claiming too much annual leave.

One hospital with 23 operating theatres improved the way it tracks the products used during surgery and saved £230,000 in the first year.

A hospital using the soluble version of a steroid was paying £1.50 per tablet, compared to just 2p for the solid version. By selectively using the soluble version it is saving £40,000 every year.