Managing high value capital equipment in the NHS in England - Public Accounts Committee Contents


In the past three years, NHS trusts in England have spent around £50 million annually on buying three specific types of high value capital equipment - Magnetic Resonance Imaging (MRI) and Computed Tomography (CT) scanners, used mainly for diagnosis, and Linear Accelerator (Linac) machines for cancer treatment. The current value of these three types of machines in the NHS is around £1 billion. Patient demand for services from these machines has increased significantly in the last decade and continues to grow.

Since 2007, the Department of Health (the Department) has devolved responsibility for procuring and managing these machines to individual trusts but this structure is not conducive to delivering value for money. Each trust makes its own assessment of demand, buys specific machines through the route of its choosing and operates the equipment as it sees fit. As we have heard before, despite having no control over the actions of individual trusts, the Department remains accountable for value for money across the NHS system. We continue to question whether the system provides value for money when Foundation Trusts act independently with no explicit incentive to adopt best practice nor to work together to achieve economies of scale. We are concerned that the NHS is failing to optimise its purchasing power, crucial at this time when £20 billion of savings in the NHS are required by 2015.

The NHS currently has inadequate information to assess cost, performance and capacity across the system as a whole. Commissioners and trusts have no mechanism to understand the reasons for large variations that persist in the use of MRI and CT machines, as they are unable to compare their performance with other trusts. The NHS needs to make high quality, comparable data available on machine use and cost. We welcome the Department's plan to require all trusts to produce data on MRI and CT scan use. A standardised, national dataset would help trusts to compare unit costs and benchmark their performance. It would also enable commissioners to identify the large variations in utilisation across trusts and take appropriate action.

The procurement and management of high value equipment is fragmented and uncoordinated, leading to wasted resources and variable standards of services. Trusts have three main ways to purchase high value equipment: by dealing directly with suppliers; through framework agreements, managed by NHS Supply Chain; or by joining up with other trusts in collaborative purchasing arrangements. We were told that framework agreements are generally a more efficient way to purchase one-off equipment orders yet one in five of these machines are bought outside framework agreements and the Department has no power to mandate trusts to use them.

Even within the framework agreement there remains much greater scope to save money by bundling orders together across trusts, as the Department showed through its Cancer Equipment Programmes of 2000-2007 which delivered savings of around £38 million through aggregating demand. NHS Supply Chain has, however, so far placed no bulk orders for any of these three types of machine we looked at, despite now purchasing over 80% of such machines for the NHS. All orders have been placed individually with no aggregation to larger volumes. This is a lost opportunity to use collective buying power to get lower prices and we expect NHS Supply Chain and other collaborative procurement bodies to work with trusts to share plans on future needs and get better prices and value for money by exploiting the joint buying power.

Trusts vary in the effectiveness with which they use their machines, as demonstrated by differences in the number of scans per machine, opening hours and waiting times. For example, the average number of scans per CT machine varied from around 7,800 to almost 22,000 per year and opening hours ranged from 40 to over 100 hours per week. There are also unacceptable response times for certain conditions, for example, 50% of people who have a stroke are not getting a scan within 24 hours. Furthermore, an estimated 13% of cancer patients are not getting access to radiotherapy when it could prolong their lives. Trusts therefore need to increase the flexibility with which they manage and use equipment.

Half of the machines in use will need replacing over the next 3 years, at a cost of £460 million. The Department has not assessed whether existing machines could be used more efficiently to meet rising demand to make better use of scarce financial resources at a time when the NHS needs to find £20 billion of efficiency savings.

On the basis of a report by the Comptroller and Auditor General,[1] we took evidence from the Department, NHS Supply Chain and University College London Hospitals NHS Foundation Trust on managing high value capital equipment in the NHS in England.

1   C&AG's Report, Managing high value capital equipment in the NHS in England, HC (2010-11) 822.  Back

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© Parliamentary copyright 2011
Prepared 25 October 2011