Health Purchasing Victoria

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• Health Purchasing Victoria
• Update

Presenter Dennis OKeefe To AHSPO
Conference 19 October 2005
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Role of HPV (Duckett Report)

• Supply of Goods and Services
• Tendering contracting
• Data information for decision making
• Policy Regulation
• Establish policies, practices and directions
• Monitor compliance
• Fostering of Systems Improvement of Electronic
  Trading
• Provision of Advice, Training Consultancy
  Services

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Strategic Objectives

• Manage Relationships
• Contract Strategy
• Administration of Tender Process Contracts
• Data Collection
• Polices
• E-commerce/Supply Chain Reform

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Progress to Date

• HPV has been in operation for four years on 1
  July 2005. HPV operates with an annual budget of
  1.3 million and progressing towards 13 FTE
  staff.
• The overall priority of HPV during this time has
  been focussing on tender process and contract
  management as represented in the set of strategic
  objectives agreed by HPV members. The members of
  HPV have reaffirmed the strategic objectives in a
  recent strategic planning exercise.

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Progress to Date

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Progress to Date

• The result of this is cumulative 22 contracts
  with a cumulative value of 543 million as at Oct
  2005

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Contract activity
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VAGO Performance Audit

• Health Procurement Practices
• http//www.audit.vic.gov.au/reports_par/agp110cv.h
  tml

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Recommendations

• That the Department of Human Services, hospitals
  and HPV determine which goods and services should
  be subject to central procurement and which
  should not, in order to provide HPV with a clear
  direction and scope for its activities.
• That HPV develop a tender program based upon a
  robust evidenced based methodology, and which
  meets the needs of hospitals
• That the current procurement model be reviewed by
  DHS to ensure that it is operating to best effect
  in the public health sector
• That DHS, hospitals and HPV work together to
  establish better relationships in the interests
  of achieving better procurement outcomes for the
  health sector

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Recommendations

• That hospitals and HPV work together to better
  coordinate data delivery to make more effective
  use of resources
• That HPV analyse public health sector expenditure
  to identify potential areas for its intervention,
  and to provide a better basis for allocating
  HPVs resources to deliver best return to the
  sector
• That HPV take a lead role in addressing obstacles
  to efficient health procurement and supply chain
  management
• That HPV review its communication strategy, in
  consultation with hospitals, to better focus its
  communication efforts

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Recommendations

• That HPV review its current practices,
  particularly relating to data management, to
  ensure efficient resource utilisation
• That HPV develop relevant and appropriate
  qualitative and quantitative performance
  indicators, and set measurable auditable targets
  for monitoring and reporting on its performance
• That all hospitals develop procurement/supply
  management strategies derived through an evidence
  based understanding of the barriers and
  opportunities, and which identify key savings
  initiatives and targets
• That all hospitals develop their IT systems and
  staff skills to ensure that relevant and
  appropriate data are available for internal
  monitoring of their procurement activities and
  the savings achieved, to inform their decision
  making, and to provide to HPV to assist in its
  central contracting and tendering activities

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Recommendations

• That all hospitals identify a senior executive
  with overall responsibility for identifying,
  implementing and reporting on organisation wide
  procurement initiatives and that hospital boards
  maintain a focus on procurement.

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HPV Response

• Education
• Data Analysis
• Communications Strategy
• Policy Practices
• IT Infrastructure
• e-Procurement

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(No Transcript)
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Education

• Objective
• To improve the skills of procurement / purchasing
  officers throughout the Victorian public health
  system. This will
• Enable Health Services to take advantage of HPV
  opportunities.
• Improve purchasing practices throughout the
  sector for all purchases (ie both HPV and non HPV
  contracts).
• Activity
• Engagement of a short term resource (eg six
  months) to conduct a training needs analysis of
  HPV and Health Service procurement personnel.
• Define career paths and build a competency
  framework linked to career development
• Develop accreditation of courses for training.
• to co-ordinate training rather than deliver
  training directly.These courses would also link
  into VGPB recognition processes and PACCER
  courses.
• Identify sources of funding for staff to attend
  training
• Administration at HPV Secretariat
• Timing
• 2005-06 Conduct training needs
  analysis. Commence accreditation identification
  / development.
• 2006-07 Commence training course co-ordination
  for Health Service HPV employees.
• 2007-08 Evaluate effectiveness.
• Ongoing course delivery.

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Data Analysis

• Objective
• Analyse information provided by Health Services
  (eg purchase volume, price, strategic
  procurement, deal information) to
• develop tender plan focussing on areas most
  likely to deliver greatest benefit and
  procurement reforms
• assist tender evaluation and decision making
• measure benefits
• identification of special deals
• monitor contract compliance
• supplier compliance.
• Develop automated means of obtaining data from
  Health Services
• Activity
• Engagement of a full time data / business analyst
  to analyse / interrogate information in Health
  Services
• develop data analysis methodologies and analytic
  procedures
• Development of tools and business processes to
  automate data collection processes
• Timing
• 2005-06
• Data analyst to commence as soon as funding is
  made available.
• Implementation of analysis methodologies and
  development of data extraction scripts will also
  largely occur within the current financial year.

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Communications Strategy

• Objective
• To ensure that Health Services better understand
• the opportunities available
• - appreciation of sale savings to organisation
• how to structure purchasing activities to exploit
  opportunities
• role of HPV
• Activity
• Engagement of a resource to design a
  communications strategy focussed at Health
  Services, Industry and Government.
• Targeted communications strategies for differing
  stakeholders
• Supplier / Industry / Regional forums /
  Associations
• Implementation of Communications Strategy
• Timing
• 2005-06 Design and implementation would be
  achieved in the current year.Marketing strategy
  ongoing for future years.

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Policy Practices

• Objective
• To develop purchasing policies, procedures,
  templates and other tools that can be used to
  improve purchasing throughout the health sector.
• drive ongoing improvement in effectiveness and
  efficiency
• To identify best procurement and supply chain
  practices and facilitate their implementation
  across the Health sector.
• To promote better procurement and supply chain
  practices
• Activity
• Identify supply chain best practices, develop
  templates, user guides, purchasing manuals,
  libraries of case studies etc that can be applied
  at Health Service level, for example-
  contracting- tender management- terms of
  trade- disaster recovery / contingency
  planning- purchasing procedure manuals-
  application of International and Australian
  Standards- handling of dangerous goods.
• Timing
• Commence immediately.

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IT Infrastructure

• Objective
• To establish and maintain a database of
  purchasing data
• To fulfil information needs of HPV and Health
  Services
• To improve the efficiency of tending processes
  for HPV, Health Services and Suppliers
• Activity
• Full time IT Administrator to strategically plan,
  develop, implement and administer HPVs IT
  resources.
• Contracts database
• Product / equipment evaluation database.
• Implement e-Tendering
• Develop intranet
• Timing
• 2005-06 Employ IT Administrator - Develop IT
  Strategy
• 2006-07 Implementation of IT Strategy -
  Creation of appropriate infrastructure
• 2007-08 Implementation of IT Strategy -
  Rollout of applications

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e-Procurement

• Objective
• To foster improvements in the use and application
  of purchasing systems and trading by electronic
  transactions by health and related services.
• Activity
• Develop an e-Procurement strategy for the
  Victorian Health sector in accordance with the
  attached methodology
• Perform an Environmental Scan
• Develop a vision for desired state of Health
  Services in relation to e-Procurement
• Develop strategic options
• Develop a detailed business case to support the
  recommended strategy
• Initially led by a Project Manager, assisted by a
  Project Officer.
• Potential e-Procurement strategies include
• Development of electronic catalogues maintained
  /hosted by key suppliers
• Implementation of standardised electronic
  transactions (requisitions, orders) between
  Health Services and key suppliers
• Implementation of e-Tendering.
• Timing
• An e-Procurement Strategy and supporting detailed
  Business Case would be developed by 31 December
  2006.

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The Future

• Supply Chain Management will be elevated in
  importance, focus will be on reducing costs
  across the whole chain
• Information will become available that will allow
  hospitals to better understand and manage their
  costs
• Aggregation of spending and on-contract
  purchasing less individual pricing
• Collaborative Competition

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The Future

• Greater co-operation between hospitals, States
  Vendor alliances
• Supply chain management will have been
  reengineered and Best Value focused

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Conclusion
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Thank You
www.hpv.org.au