The high value capital equipment challenge

Magnetic Resonance Imaging (MRI) and Computed Tomography (CT) scanners used for diagnosis and Linear Accelerator (linac) machines for cancer treatment, have accounted for a spend among NHS Trusts in England of around £50 million every year over the past three years. The current value of these machines in the NHS is around £1 billion. However, a recently published report from the National Audit Office (NAO)1 concludes that value for money is not being achieved across all Trusts in the planning, procurement and use of these high value items of equipment. There are significant variations across the country in levels of activity and a lack of comparable information about performance and cost of machine use. The report also highlighted the fact that Trusts are not collaborating to purchase machines and are not getting the best prices, with 25% of purchases in 2009-10 being made outside existing framework agreements, with opportunities being missed to secure lower prices by grouping together requirements for new machines. Looking firstly at CT scanners, there are a total of 426 units in England, 376 of them installed in the last 10 years. The average life of a CT scanner is between 7 and 10 years, and the average age of existing machines in the NHS is 6.2 years. There are 304 MRI scanners, 267 of which have been installed in the last 10 years. The life of an MRI scanner can be between 7 and 10 years and the average age of MRIs in the NHS at the present time is 6.3 years. Although machines can be used for longer than their expected working life, they become more expensive to maintain and may not be capable of delivering the latest techniques required by clinicians. They may also suffer more downtime which means they cannot be used for the benefit of patients. Radiotherapy is fundamentally important to radical and palliative cancer care. Evidence has shown that 53% of cancer patients should receive radiotherapy during their treatment, with this treatment contributing in 40% of the cases where cancer incidents are cured.2 Currently there are 246 linac machines in use in 49 NHS Trusts. Their lifespan is around 10 years and the average age of existing machines in the NHS is 6.5 years. These figures indicate that a large number of high value machines will be due for replacement within the next three years, at an estimated collective cost of around £460 m.

Cost requirements

Meeting these cost requirements will be a challenge, requiring careful planning by individual Trusts, as there is no longer a centrally funded programme, and the capital funding system now has to be funded from individual Trust revenues and loans. The NAO report warns that the NHS currently lacks the information and benchmarking data required to secure cost-efficient procurement and sustainable maintenance of these key elements in modern diagnosis and treatment. The report calls for more accurate and up-to-date information to be made available on equipment utilisation, which could help Trusts to better assess how efficiently they are using their MRI and CT scanning machines. It says that the NHS Commissioning Board should set standards for accurate and comparable data in the use of high value capital equipment. Currently Trusts record unit costs per scan differently, which makes it difficult to compare costs across Trusts. The report recommends that the Department of Health (DH), and, from 2013-2014 onwards, the NHS Commissioning Board, should design tariff prices in a way that incentivises more efficient use of the machines and recognises that Trusts may need to find several hundreds of millions of pounds to replace machines in the coming years. The NHS Commissioning Board, in designing the structure of the tariff, and Monitor in setting prices, should also consult on how to improve unit cost information for scanning and radiotherapy machines, and address how tariffs can improve the efficiency of use. As part of its Quality, Innovation, Productivity and Prevention (QIPP) savings programme, the report says that the DH should examine how well equipped Trusts are to understand the value in their acquisition decisions, including the extent to which they use framework agreements to secure good value deals for purchase and maintenance of high value equipment.