National buying to slash NHS costs

The Department of Health hopes to save hundreds of millions of pounds for the NHS thanks to the economies of scale made possible by national purchasing.

The cost of buying software licences could as much as halve, says director general of NHS IT Richard Granger.

'To those people who ask "why a national procurement?", I say, because we will save hundreds of millions of pounds by doing so. And we will conclude the procurement process with significant savings in terms of elapsed years,' he said.

Granger heads the team tasked with implementing the £5bn NHS National Programme.

The five-year plan places technology at the centre of the government's agenda to modernise the health service. Core projects are the creation of a high-speed broadband infrastructure, a nationwide electronic patient record system and applications for appointments and prescriptions.

National buying will significantly reduce unit costs, says Granger.

'For example, a major software supplier has advised me that they don't expect to make significantly more revenue than they do at the moment, where they supply about 25 per cent of the NHS, and they aspire to take this to 50 per cent.

'So on that basis, you could look at the unit cost halving. There will be enormous reductions in the cost of software licences and the cost of acquistion and procurement,' said Granger.

The estimations are drawn from a report commissioned by the Department of Health from consultants McKinsey.