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NHS urged to review equipment portfolio amid calls for a switch to procurement based on patient outcomes

MEDTECH industry leaders are urging NHS trusts to review their equipment purchasing processes so that procurement decisions are based on patient outcomes, not historic spending patterns.
 

With a curb on capital spending, and a lack of revenue available, trusts are being warned they can’t just replace equipment across the board and will instead need to concentrate their cash on meeting priority patient outcomes.

 
“The savings demanded are considerable, but with careful planning they can be achieved without impacting on patient service”

This is particularly important in light of a letter sent to hospitals last week in which Stephen Hay, chief operating officer of Monitor, the independent regulator of NHS trusts, confirmed the annual efficiency savings needed would be in the region of 6%-7%, not the 4% originally mooted by ministers.

 
And these cuts will need to be made at a time when the Government is expecting improved patient outcomes and the MedTech industry is responding with a catalogue of new, high-tech devices often much desired by clinicians.
 
This is proving a headache for procurement leaders, who will have to balance the demands of medics with the need for finance managers to keep a tight hold of the purse strings.
 
In an interview with HES, Lucy Hutchins, Asteral’s head of planning services, said: “New, state-of-the-art technology costs millions, but in an ever-changing environment, NHS trusts can find this major investment soon becomes redundant or under-used while other, insufficient items are over capacity. In addition to the financial concerns, this has a negative impact on patient care and is often accompanied by a lack of data, which is needed to justify new purchases of equipment.”
 
“An indepth review of equipment can help to significantly reduce portfolios while improving patient service, drastically reducing budgets, but also saving time, space and day-to-day running costs”
 
Her advice is for trusts to carry out an indepth review of their equipment portfolio; the first important step to helping prioritise where to spend increasingly-limited resources.
 
She said: “The savings demanded are considerable, but with careful planning they can be achieved without impacting on patient service. In fact, an indepth review of equipment can help to significantly reduce portfolios while improving patient service, drastically reducing budgets, but also saving time, space and day-to-day running costs.”
 
Asteral has already worked with a number of NHS trusts to provide independent analysis of current spending patterns, helping to bridge the divide between clinicians and financiers.
 
“Monitor does have teeth and is going to be watching carefully to see how trusts are performing and making efficiencies”

At one particular trust the company was called in to undertake a review of radiology equipment. The finance director was concerned at the large number of requests for new equipment, which were made with little or no supporting evidence to justify the purchase.

 
Hutchins said: “We analysed the case mix of patients, utilisation of equipment and designed an investment plan based on our findings. When we delivered this and compared it to the original plan, we found savings of 10% and improved the patient flow.
 
“When we look at a department we will try to consider the rapidly-evolving technologies and how they can improve working practices. For example, we are seeing increased use of ultrasound and MRI and, based on patient outcome targets and clinical practice, we predict this will continue, so this is an area where spending is likely to be focused.”
 
She added: “There is a huge amount of expenditure in the NHS and resources are increasingly being stripped. We advise trusts to undertake planning work, not just to secure value for money, but also to help them to understand the best solutions available. Technology is continuously improving and there are always new and exciting things around the corner, so having flexibility is absolutely key.
 
“Whether trusts carry out reviews themselves, or bring in an independent company, they need to know exactly what they have, what they need now, and what they will need in the future.
 
“We advise trusts to undertake planning work, not just to secure value for money, but also to help them to understand the best solutions. Technology is rapidly improving and there are always new and exciting things around the corner, so having flexibility is absolutely key”
 
“By reducing the equipment portfolio, trusts can keep up the good levels of service they provide and generate accurate data on which to base future decisions.”
 
Ignore this and, she warned, there could be dire consequences.
 
“If trusts do not perform financially, then the regulator, Monitor, will get tough and might intervene. Its powers under the proposed system are very broad, from closing a specific service or requiring a board to take action, to forcing a trust to bring in external advisors. It does have teeth and is going to be watching carefully to see how trusts are performing and making efficiencies.”