Cosy cartel of suppliers is ripping us all off

THE NHS has enormous purchasing power. Its hundreds of hospitals across England buy equipment – from loo paper to CT scanners – worth at least £22billion every year.

But many people would be surprised if they knew just how poorly the NHS uses its financial muscle to strike a good deal from its suppliers.

In short, our hospitals are getting ripped off left, right and centre. And with £18 in every £100 you pay in tax being spent on the NHS, that means you’re getting ripped off.

As a Health Minister in the Coalition Government, I had a team look into how much hospitals could save by ‘buying better’ from their suppliers. The staggering answer? At least £2billion a year. That sort of money would pay for a lot more doctors and nurses.

We made some headway by getting local groups of hospitals to work together so they could drive better deals with suppliers.

But we never achieved the big prize – of forcing suppliers to state publicly a unit price for everything they sold to the NHS.

If managers in one hospital could see how much less their counterparts in the next town were paying for surgical gloves, disinfectant wipes or intravenous cannulas, they could get better deals. Transparent pricing would drive prices down across the board – saving the NHS colossal sums of money, to be reinvested into frontline patient care.

We knew we were on to something when the big medical product companies made it clear they would fight us tooth and nail. These firms operate by giving NHS buyers the impression they are getting a good deal. But that can often be smoke and mirrors. For instance, a supplier will give a hospital trust what looks like a great price on a big-ticket item as a sweetener. But the firm will insist the hospital keeps the price secret and will also insist it has to buy a whole suite of other products.

So while NHS managers think they are getting a good deal, in reality they don’t really know.

The big medical suppliers are using this price secrecy to divide and rule individual trusts.

That is why they started lobbying the Government at the highest level when I put forward the plan to have a price-transparency clause inserted in all NHS supplier contracts.

In quiet conversations, they implicitly threatened to cut investment in Britain’s life sciences industry if we forced them to come clean on prices.

I believed this was a largely empty threat, but to my intense frustration we failed to make progress in delivering the price transparency that could save the NHS so much money.

It’s a great shame. Because as the NHS struggles to meet the demands of our growing and ageing population, it can ill afford to swell the coffers of a cosy cartel of companies.

Dan Poulter is the Conservative MP for Central Suffolk and North Ipswich, and an NHS hospital doctor.