IMPLEMENTING HIGH VALUE PROCUREMENT MODELS AND STRATEGIES. Health Procure 2015 Melbourne February 2015

Transcription

1 IMPLEMENTING HIGH VALUE PROCUREMENT MODELS AND STRATEGIES Health Procure 2015 Melbourne February 2015

2 A snapshot of who we are and where and aspire to be 2

3 Who is Health Purchasing Victoria? At Health Purchasing Victoria (HPV) we help public health care services deliver high quality patient care by ensuring they have a reliable and agile supply chain. We do this by: Partnering with them to organise collective contracts for the things they buy. Providing advice and education on how to get their supply chain working at its best. Ensuring Victorian Government health purchasing policies are complied with.

4 HPV Core Functions Health Services Act To supply and facilitate the supply of goods and services 2. To provide Advice and Support 1. Foster Improvement in use of systems and e-commerce 2. To maintain useful data and share with health services 1. To ensure probity is maintained in the purchasing, tendering and contracting of public hospitals 2. To monitor Compliance $cost reduction benefits delivered Procurement Reform (RPA) support Victorian Product Catalogue System Recallnet Strategic Sourcing Suite Development of a policy and probity compliance framework for health services 4

5 Our Customer Base (mandated health services) 5

6 6 Health Purchasing Victoria Achieving best-value supply chain outcomes for Victoria s health sector

7 Medical Consumables and Pharmaceuticals Indirect Materials and Services Medical Equipment HPV Category Management Streams Category management Rationalisation and process improvement Managing supplier performance Understanding spend Standardisation Service requirements Leveraging collective procurement efficiency Orthopaedic Prostheses Pharmaceuticals Surgical Instrument sand Laparoscopic Trauma Implants Heart Valves Dressings and bandages Gloves Radiopharmaceut ical Continence Management Wound Care Clinical Protective Apparel l Interventional Radiology Interventional Cardiology Enteral Feeds Agency Labour I language Services Waste Management Pathology Services Catering Supplies Office Requisites Utilities Chemical Products Hand Hygiene Non-Emergency Patient Transport Radiology Services Linen Services Defibrillators Monitoring Equipment Beds and Mattresses Haemodialysis Infusion Pumps Medical Imaging Pathology Equipment Ventilators Equipment Maintenance Maturity Growth Development 7

8 HPV Key outcomes 8

9 Analysing the evolution of the procurement environment in the healthcare sector 9

10 Group purchasing evolution The future? Late 90s Early 2000s Group contracting 20-teens Contracting, Analytics Consulting Value Cost- Quality Outcomes Solutions Hospitals go it alone (Lower) Price Supply 10 Health Purchasing Victoria Achieving best-value supply chain outcomes for Victoria s health sector

11 The Evolution of HPV as an organisation Health Act creating the organisation Med-cons /Pharma focus low cost, high volume 5 Employees Expansion into general consumables and services. Strategic Plan Organisation growth from 12+ Employees Strategy Plan On-going delivery of the strategic plan >Procurement Reform >Medical Equipment >Re-organisation streams Supply chain >Capacity and Capability (65+ Employees in 2015) >Investment on information enablers (data) >Support sector con the compliance framework Continue to Build Excellence - Enablers >Single integrated supply chain organisation >single system (HPV and health services as a system >High level of efficiency >Unlocking full value for the sector >Building strong relationships customer and suppliers >Sustainability Focus talented organisation Market sustainability 11

12 The Procurement Team 30 Staff SCM/CM/CO and SME Director Procurement IMS (HOS) Medical & Pharma (HOS) Equipment (HOS) Sourcing Operations Key Deliverables Value delivery Bringing every year additional spend under collective procurement Category Management of $625M+ spend.. HOS = Head of Sourcing Key Deliverables Support across all l sourcing streams VGPB reform internal roll out Process efficiency e-sourcing change management Build internal capacity and capability Drive NPC/VPC/RecallNet compliance 12

13 The Procurement Reform Key Enabler To Innovation/Efficiency/Excellence Key Aspects of Procurement Reform Change from the threshold procurement (greater than $150K RFT) to strategic sourcing Adoption of category management Long range sourcing plans Traditionally HPV worked on an annual sourcing plan 1. Set up project 2. Approve the plan 3. Build policy 4&5. Build strategy & plans 6. Build organisation s skills 7. Success! Transition approved. Dec 2014 June 2015 June 2016 Early 2015 Dec

14 Victorian health supplier musts Support GS1 data standards through National Product Catalogue (NPC) and Recallnet Goods approved by TGA Ability to meet the specific (& diverse) operational needs of health services Understand two-way nature of Supplier Relationship Management process 14 Health Purchasing Victoria Achieving best-value supply chain outcomes for Victoria s health sector

15 Past (a reminder of Evolution) Old hospital Materials Management model Purchasing place and chase orders Stores receive and deliver Health Purchasing Victoria Achieving best-value supply chain outcomes for Victoria s health sector

16 Innovation..Evolution and..complexity 16 Health Purchasing Victoria Achieving best-value supply chain outcomes for Victoria s health sector

17 Evaluating current health procurement trends and challenges 17

18 Innovation? Technology/Process Delivery of Patient Care Sustainability Process Innovation Supplier Technology Market Dynamics Legislation Policies Service Innovation 18

19 We are making changes to Procurement..such as Capability and Culture Category Management Structures and Systems Embrace Category Management framework as it does delivery on-going contract value. Staff development and retention Learning and Development Strategic Cost Management Category Management Supplier Relationship Management Negotiation Governance Contract Law Price Utilization Cost Standardization Demand Mgmt Labour Productivity Maintenance Shrinkage Damages Waste Disposal Recall Mgmt Revision Procedures Infection Rates Etc. Victorian Product Catalogue More interactive Website Recallnet Knowledge Management Strategic Sourcing Suite E-sourcing Supplier Management Contract Management Zendesk (customer interface) Organizational Efficiency 19

20 Supplier Relationship Management Quarterly or Monthly Strategic Forum (Management Executive Leadership Team) HPV Leadership Team Strategic Business Directions and Industry Dynamics (Contract Management Review Top 20) Heads of Sourcing Senior Category Managers Driving Supply Strategy and identification of further supply chain opportunities Monthly Operational Meeting (Critical Suppliers) HS Representatives Supplier Account Manager Driving Contractual performance and value optimisation throughout the contract life Service/Cost improvement Monitoring Feedback to HPV 20

21 Key Themes in the HPV Category Management External: 1. Buy Local 2. Regional market sustainability 3. Ethical procurement 4. Currency 5. Innovation 6. Global Inter jurisdiction benchmarks Sharing Benchmarked data Local Employment - Regional Areas Process Governance Category Management Supply Chain Efficiency Sustainability Buy Australia First Ethical Procurement Supply Chain Efficiency and Risk Internal (Sector/HPV): 1. Greater expectations from stakeholders (individual HS business priorities) 2. Greater process efficiency 3. HPV contract performance (order efficiency ) 4. Monitoring of our response to queries (supplier and health services) - Zendesk 5. Sharing and Collaborating with other Sectors 21

22 Exploring and designing future models and strategies 22

23 Unlocking Value Beyond Price Procurement efficiencies centralise procurement, purchasing, accounts payable Uncovering cost of quality Supply chain costs Over-specification (Fit for purpose) Duplication Operational Efficiency Administrative costs Supply security Cost of Service (Do we really need it next day tomorrow?) Do we know the cost of servicing? 23

24 Lost Value Nirvana On-Going Value Delivery Supplier Collaboration Supplier Performance Management Contract Start Date Strategic Sourcing Value 75% of sourcing savings can be lost within 18 months without SRM - Geller & Company Survey No Supplier Relationship Management Program Time 24 24

25 GLOBAL INNOVATION IN PROCUREMENT France: Pre market process, online portal for suppliers to submit ideas which are preliminarily evaluated Canada: annual ranking of ideas that have been submitted and reviewed by a panel to say "here are the top ten ideas" EU: initiative for healthy aging with France, UK, Italy, Belgium, using tool to submit via online portal Incentives for customers - need to understand innovation is often disruptive, what are key drivers for the clinicians Role of GPOs in innovation - not a bystander or inhibitor 25 Health Purchasing Victoria Achieving best-value supply chain outcomes for Victoria s health sector

26 Supply chains & sustainability Procurement is the interface between end-user and suppliers Can be a barrier to improving sustainability Can be an enabler of action towards sustainability

27 Ingredients to Success Invest to succeed Attract & Retain Supply Chain Talent Standardisation, common systems, ecommerce, eprocurement, Data is Critical Transactional data Benchmarking Evidence Learning and Drive compliance Market Data 27 development Victorian Product Clinical performance data strategy Catalogue Customer Service Succession Planning Compliance to DIFOT RecallNet Process Attract and retain Currency/Material movements Standard invitation talent to supply (ITS) Other index movements Make HPV the Capture in a Benchmarking data employer of choice standard data Cost of Service product Cost of care performance.

28 Category Vision (Victoria Leader in Medical Imaging Sourcing) Critical Issues being Addressed Streamline sourcing process (remove duplication) Provide transparency around Purchasing and Efficiency Life Cycle Costing evaluation Fit for purpose accurate specifications Provide Access to latest technology and capture innovation Strategic Framework: Standardised Terms and Conditions Access to product details in consistent format Establish Category Management Group Single source of data for benchmarking Opportunities for further savings (BETA, Reference site etc) Open framework to drive Innovation Interface with the DHHS on key issues of asset planning and maintenance Move from Focused (Today) To Strategic (Future)

29 A data vision Actual Cost of Products/ Procedures Reporting and Budgeting Cycle Supply Chain Management Point of Use Capture Patient Record Sourcing Beyond Price Recall Management/ Product Quality Surveillance Comparative Effectiveness Outcomes-Based Analyses (e.g., Registries)

30 Clinical Product Evaluation Unit (Vision) Purpose Promotes evidence based practice and research Capture of product performance via standardised report from CPAs. Activities Lead clinical product evaluations and product substitutability Collaborates with clinicians Consolidate product evaluation data to share amongst health service Benefits Identify market dynamic opportunities Minimise product evaluation duplications Standardise product evaluation standards Revise contract product list based on clinical performance Bring evidence based data into the sourcing evaluation process Clinical product evaluation and research is the cornerstone in the evaluation of product substitution. HPV is in the process of a business case to develop a CPEU. 30

31 Some key themes Global markets Equipment lifecycle Profession -alisation Disruption Shared services Beyond Price 31 Health Purchasing Victoria Achieving best-value supply chain outcomes for Victoria s health sector

32 Sustainable Procurement role Climate Biodiversity Water Sustainability of supply chains Agriculture Commerce & Industry Natural Resources Economy Wastes Pollution Healthcare Sector Developing countries Society Health Local Communities Sustainability

33 Building the link between suppliers and Health services that enables excellence in Patient Care 33

34 Level 34 Casselden Place 2 Lonsdale Street Melbourne 3000 T: F: hpv@hpv.org.au 34