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Procurement in a nutshell – Lord Carter of Coles’ interim report

In this Nutshell, we will be looking at some of the interim findings contained in Lord Carter's Interim Report on the Review of Operational Productivity in NHS providers which was published on 11 June 2015 ('the Report').

The full report is available here.

Lord Carter was asked by the Secretary of State for Health to review the operational productivity in NHS hospitals in England. Lord Carter’s review included engaging with 22 NHS hospitals throughout England.

A further update on the Report is expected to be released in the autumn.

What’s new?

From the data available so far, the Report suggests that whilst there is a reluctance to set detailed targets, savings of up to £5bn per annum by 2019/20 might be achieved.

The Report concludes that there is a need for a ‘model hospital’. This model hospital would demonstrate how good clinical practice, workforce management and careful spending can lead to efficiency savings that can be measured, whilst maintaining or improving quality.

The Report collected all accounts payable and purchase order data for the last two years from the 22 hospitals and found that only 18% could be matched.

In the procurement of supplies, global best practice for everyday consumables suggests a catalogue of 6,000-9,000 product lines with a price variance of 1-2%.

The Report found that in the NHS, there are as many as 500,000 lines with some price differences exceeding 35%. The Report suggests that a solution is to develop a single NHS electronic catalogue. Further detail on this catalogue is expected in the autumn.

According to the Report, the Sunshine Act in the USA requires that manufacturers of drugs, medical devices, biological and medical supplies collect and track all relationships with physicians and teaching hospitals and report this centrally.

The aim is to increase transparency of financial relationships between healthcare providers and manufacturers, and to uncover possible conflicts of interest.

The Report suggests that consideration is being given to whether there is a need for a similar law in England.

Why is it important?

The Report, whilst only at an interim stage, is thought-provoking and has made some intriguing findings. It is clear that there is the potential for NHS providers to make savings and efficiencies across a number of areas. There may also be lessons for other parts of the public sector, particularly local government.

We would welcome the opportunity to discuss the Report with you, and the possible changes you might wish to consider making based on the recommendations and findings contained within the Report.

How can I find out more?

If you have any queries on the issues raised or on any aspect of procurement, please contact us via our procurement hotline on 0191 204 4464.

Please note that this briefing is designed to be informative, not advisory and represents our understanding of English law and practice as at the date indicated. We would always recommend that you should seek specific guidance on any particular legal issue.

This page may contain links that direct you to third party websites. We have no control over and are not responsible for the content, use by you or availability of those third party websites, for any products or services you buy through those sites or for the treatment of any personal information you provide to the third party.

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