Lord Carter has urged trusts to be open minded about the benefits of a more centralised purchasing system as he unveiled his early priorities as the newly appointed “procurement champion” for the NHS.
The Labour peer, who has previously carried out a review of the NHS pathology services, told HSJ trusts must ensure they are “comparing like with like” when they look at the centralised prices offered by NHS Supply Chain.
He said: “I don’t doubt that we could go and get a pencil off the internet or the high street for cheaper than the NHS Supply Chain.
“The problem is the NHS Supply Chain gives you the price for putting in a tote box [crate] ready to deliver to the ward. That’s quite efficient.
“The question has to be ‘how do you buy the whole basket cheaper?’ rather than just pulling out different things which undermine the whole centralised drive. I think it’s cracking that and making sure everybody understands it.”
He said there was currently “a very confused landscape” in NHS procurement, which accounts for around £22bn of annual costs, and this was “partly driven by people’s frustrations that there is no single point of authority which can demonstrate clear savings”.
He added he would draw on experience of health systems from across the world such as those in Germany and France as part of his review.
The peer said the vast majority of health systems were struggling to some degree with getting best value from their non-pay bill.
HSJ exclusively revealed last week that Lord Carter, who also sits on the Cabinet Office’s efficiency and reform board, had been appointed as NHS procurement champion.
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Lord Carter’s private sector experience – he is president of health IT firm McKesson’s international operations group – also made him an attractive option for the Department of Health.
He will chair a new NHS procurement and efficiency board, the members of which are currently being selected, charged with overseeing the DH’s procurement programme, which aims to find up to £2bn worth of cashable savings by 2015-16.
Lord Carter said he could not yet comment on whether he thought the challenging savings target was achievable, but said he agreed with the DH in principle on the need for a more centralised system.
It is not yet clear whether the board will prepare a public report similar to his pathology review or if the intelligence gathered will be disseminated in other ways.
He said over the summer he would look to select members for his board which would focus on different work streams with a review of the legal advice trusts are working to and temporary staffing being two areas he would look at imminently.
The NHS spends around £22bn annually on goods and services, or non-pay role expenditure, which typically accounts for around 30 per cent of the operating costs of each hospital.