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The Commons Public Accounts Committee publishes it fifty third report of Session 2010-12, on the basis of evidence from the Department of Health.

The Rt Hon Margaret Hodge MP, Chair of the Committee of Public Accounts, said:

"High value equipment in the NHS - like MRI and CT scanners - is worth around £1 billion, but the way this equipment is bought and used is not providing value for money for the taxpayer.

We were shocked by the unacceptable response times for certain conditions. A modern NHS should not allow 50% of people who have a stroke to wait more than 24 hours for a scan. There are unacceptable variations between trusts in the number of scans per machine, from 7,800 to almost 22,000 a year; opening hours and waiting times.

The Department of Health has got to look at how machines can be used more efficiently to make the best use of scarce resources.

Not enough trusts are taking full advantage of the framework agreements the NHS Supply Chain negotiates. Even where they do, money is being wasted because trusts don’t join together to buy equipment and get the best deals by exploiting their bulk buying power.

The Department of Health is accountable for securing value for money in health spending but has no way of getting trusts to work together or tell them how to buy their equipment.

At a time when the NHS has to make £20 billion of savings, it is unacceptable that money is being wasted.

The Department must set out how it is going to drive value for money in a devolved world where every trust is an independent foundation trust not answerable to the Department.

We are also concerned about whether the NHS will be able meet the growing demand for scans and radiotherapy at the same time as delivering such big financial cuts. Half of all machines need to be replaced over the next three years, at a cost of around £460 million.

The issues around  high value equipment provide a potent example of the challenges facing the NHS over the next few years."

Margaret Hodge was speaking as the committee published its 53rd Report of this Session which, on the basis of evidence from the Department of Health, NHS Supply Chain and University College London Hospitals NHS Foundation Trust, examined managing high value capital equipment in the NHS in England.

Background

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 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 the committee has heard before, despite having no control over the actions of individual trusts, the Department remains accountable for value for money across the NHS system. The committee continues 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. The committee is 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. The committee welcomes 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.

Procurement and management

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. The committee was 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 the committee expects 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.

Use of machines

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.

Further Information

• About Parliament: Select Committees
• Topics: Health finance