The Colossal waste in NHS commissioning costs

Guardian 20.01.2011

We are glad to see the president of the Royal College of Surgeons speaking out against the cuts that are taking place all over the country (Report, 17 January). The health select committee said in March 2010: “Whatever the benefits of the purchaser-provider split, it has led to an increase in transaction costs, notably management and administration costs … If reliable figures for the costs of commissioning prove that it is uneconomic and if it does not begin to improve soon, after 20 years of costly failure, the purchaser-provider split may need to be abolished.”

What is needed is an end to the purchaser-provider split that underlies the market, following the example of Scotland and Wales, where the NHS has not fallen apart. It is ludicrous to stop surgeons from operating because PCTs want to save money. The marginal cost of surgery is minimal; what costs money is running the hospital, heat, light, and staff salaries. And what costs even more money is the tendering, contracting, marketing etc, which does not benefit patients and could be scrapped, while retaining evidence-based treatments that work and help patients.

The new health select committee says that “more effective commissioning is key to delivery of efficiency gains” and is critical of the “surprise proposal” to abolish PCTs (Report, 18 January). However, it does not follow up on the request to examine the cost of commissioning. DoH officials have said this was 14% of the NHS budget, but this was the cost of administration in 2002, and they are not revealing what it is now. What we do know is that administrative costs in the NHS were 5% of the budget before the 1984 Griffiths reorganisation (which brought in managers not administrators), rose to 10% in the early 90s and are probably 18% now. The cost of the market must be at least £10bn, but no one wants to discuss this colossal waste of money that has not been shown to improve patient care.

Wendy Savage

Co-chair, Keep our NHS Public