Research into the purchasing patterns of seven unnamed health authorities found that pounds 651.9m is being wasted through ignorance about which services authorities buy and what they spend.
The study, by the Anti-Rationing group, a think tank and research body, was prompted by the rationing of leukaemia treatment for 11-year-old Jamie Bowen - Child B - by the Cambridge and Huntingdon health authority.
The report examines what health authorities were paying for 40 different services and found a general pattern of inappropriate spending and massive overspending.
The findings, published in the Health Service Journal, show that health authorities knew how much money they had spent on emergency services such as casualty, surgical emergency and maternity only 65 per cent of the time.
They could also only identify 66 per cent of spending on non-acute services such as care for the elderly and mentally ill. And only 69 per cent of spending on community care services such as psychiatric nursing, drug abuse and occupational therapy could be pinpointed.
One of the health authorities investigated was unable to supply any cost break down at all.
The problem arises because of the usual practice of block buying, in which a range of services are bought in a single package. This does not allow health authorities to distinguish between the services and allocate money accordingly, says the anti-rationing group.
The report says millions are being mis-spent on buying services which are not yet proven to be effective, blind buying and overpaying on certain services.
A Department of Health spokesman said: "If anyone has evident of conspicuous waste, it should be put to the health authority concerned and the National Health Executive."Reuse content