News story

Product pricing project shows benefits of trusts sharing information

This news article was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Foundation Trust Network publishes results of a pilot benchmarking project to examine the prices paid by trusts for the same goods.

Twenty trusts took part in the project which aimed to promote greater transparency between trusts and demonstrate the benefits of sharing pricing information.

The findings include:

  • trusts reported that sharing this information is a critical starting point for improving procurement efficiency
  • significant price variations were observed with some individual trusts obtaining prices that were 30% below the average price paid
  • for some products there was greater price variation across trusts that sourced the product through NHS Supply Chain (NHSSC) compared to trusts that sourced the product directly from suppliers
  • reported procurement practices were similar across the participating trusts with the exception of corporate level engagement which was more variable
  • participating trusts cited clinical engagement as a key factor in securing the best prices.

Good procurement practices were shared at a results workshop, including methods for improving procurement through greater clinical engagement and communication.

The Department of Health considers transparency to be at the heart of the QIPP programme for procurement. It is currently exploring ways of working with the FTN to develop and launch a programme that builds on this work and provides a route for trusts to share procurement information.

NHS providers face a significant challenge to deliver efficiency savings and the QIPP Procurement Workstream aims to support trusts in achieving £1.2bn savings through improved procurement.

Jim Easton, National Director of Improvement and Efficiency, said:

‘While this project has been a managed process, NHS organisations can undertake benchmarking as formally or informally as they wish and should use this report to initiate discussions with colleagues on how pricing transparency can be developed in their trust.’

More information

Read Product pricing project report and Jim Easton’s letter to Trust CEOs on price transparency and reducing non-pay spend