Government Insight: Health Purchasing Victoria

In our ‘Government Insight’ series, we ask a member of Victoria’s public sector to share their views on a specific government initiative or strategy. Today we welcome Martin Edwards, Chief Information Officer for Health Purchasing Victoria (HPV).

Martin CIO

With a focus on easing cost pressures on health services through strategic procurement, HPV is seeking to streamline processes associated with logistics, analytics and purchasing. Industry can play an important role in supporting HPV to improve these practices, particularly relating to efficiencies in logistics management and predictive analytics.

What are the vision and objectives for Health Purchasing Victoria?

  • Health Purchasing Victoria’s (HPV’s) vision is to help public health care services deliver high quality patient care by ensuring they have a reliable and agile supply chain.
  • HPV works closely with health services to manage more than 40 diverse contract categories covering medical consumables and pharmaceuticals, indirect materials and services, and equipment.
  • As well as continuing to identify and achieve substantial financial savings to release back into the health sector, we are focused on providing strong non-financial benefits such as contract management to ensure that benefits are realised throughout the life of a contract.
  • Ultimately, HPV can play an important role to easing cost pressure on health services through supporting strategic procurement.

What are the strategic priorities and opportunities for HPV?

State-wide supply chain reform

  • Supply chain reform is essential to ensuring we have a strong foundation to support future procurement and logistics efficiencies.
  • HPV is reviewing a supply chain reform program comprising three key efficiency initiatives: collective sourcing, information alignment and analytics, and purchasing and logistics.
  • With the cost of health care rising, the need to optimise the use of our financial resources in the sector is critical. The current supply chain has a number of opportunities that could make the system more efficient by setting the foundations (data and technology) for a more agile, efficient system.

Seamless flow of information through the supply chain vision

  • Finding ways to link accurate real-time purchasing data with clinical outcomes data will give us a more complete picture of quality of patient care and cost outcomes. HPV is currently liaising with other state jurisdictions to progress the implementation of a common health product catalogue to assist this.
  • Focus on enabling technology that directly supports the efficiency of sourcing, purchasing, logistics and payments.
  • Promoting the widespread adoption of health services and suppliers to GS1’s Recallnet Healthcare – an online portal under development for managing and communicating health product recalls.

Further benefits from collective sourcing

  • Accelerating the rate at which HPV increases the value under collective procurement, by expanding the range of categories managed by HPV, can release further benefits to the health sector and reduce duplication of effort across the State. Currently HPV has approximately $676 million under collective contract; however, there is potential for more spend to be managed collectively, with more than $3 billion in non-salary spend across the Victorian health sector not under collective contract.

What do you see are the key challenges where industry can support HPV in implementing these priorities?

  • For suppliers, supporting GS1 data standards by publishing all products to the National Product Catalogue and registering on Recallnet Healthcare will directly support a more efficient healthcare supply chain.
  • We need to look beyond the price at factors such as demand management and logistics efficiencies, and reducing product variation, to continue achieving best value outcomes in our sourcing program
  • Ensuring we have broad representation on our reference groups from clinicians and subject matter experts across health services is another key priority to continue ensuring that our sourcing program continues to reflects health sector needs.

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