E-Procurement In The Public Health Sector

NEHTA is developing a National Product Catalogue (NPC) and an E-Procurement Solution to drive safety and quality improvements, and cost and process efficiencies across the national health sector supply chain.

The NPC and the NEHTA E-Procurement Solution will streamline the purchasing process of products in the public health sector through a fully automated, secure and auditable electronic transfer of healthcare product data. In addition to the anticipated safety and quality benefits these initiatives will deliver, an estimated $200 million in savings is expected to flow on from reduced errors and increased procurement efficiencies.

The NPC is a complete electronic source of information about medicines, medical devices and healthcare products, and provides a single source of product data for all procurement areas in the public health sector. The NPC now incorporates fields for the capture of important clinical information that was previously collected via the Australian Catalogue of Medicines (ACOM), which was funded by the Australian Government Department of Health and Ageing.

As of June 30, 2007 over 50 of Australia’s top medical and pharmaceutical product suppliers had populated the NPC, with many other companies in the advanced stages of adding their information. Since July 1, 2007 public health purchasing began incorporating the NPC as their primary source of purchasing data.

Major savings from the NPC will derive from the ‘one product, one code’ concept. The coding system used is a globally accepted standard and is proven in Australia, being the same as that used for retail products in major supermarkets. With this in place, the number of products incorrectly ordered because of identification errors will reduce significantly – errors that potentially delay the treatment of patients who need the right product in the right place at the right time.

Substantial savings will also arise from the NPC by removing the need for each of the literally hundreds of public health purchasing offices across Australia to maintain their own catalogue of product details. This duplication currently generates unnecessary overheads.

In terms of safety and quality in healthcare, the NPC lays the foundations for swift product recalls and precise product tracking so that flawed, out-of-date or missing stock can be discovered and replaced before it is needed for use.

The second stage of the e-procurement strategy is the implementation of e-procurement facilities. NEHTA has developed a standardised e-procurement solution for the public health sector that will standardise and simplify purchasers’ processes, and assist all Australian health departments to develop a minimum e-procurement capability whilst supporting existing structures and process already adopted by suppliers and other stakeholders in the market.

To improve public health sector procurement analysis and reporting, NEHTA has also created business intelligence tools to provide a better understanding of procurement practices from overall healthcare procurement for a health department right down to product at item level transactions across all purchasing areas.

NEHTA's approach to developing the specifications for business intelligence tools has built on structures and processes already operating in health departments and is based on learning from health departments, industry, international equivalent organisations, and appropriate local and international standards.

These tools will form the foundation for better business decisions as the public health sector captures more information electronically, and deliver the potential to identify and obtain significant savings through increased efficiencies.

Trials of the e-procurement solution using the NPC data have commenced in Western Australia through a Proof of Concept supported by NEHTA. Negotiations have also progressed with NSW to advance their solution for use of NPC Data in their health procurement processes. Most other States have indicated a willingness to begin using the NEHTA e-procurement solution in the next 12 months.

NEHTA currently has a number of additional projects underway to deliver secure, interoperable e-health systems, some of which are relevant to the work being undertaken in the Supply Chain area. This work includes:

  • Establishing an overall framework for interoperable e-health systems;
  • Standardising the terms and names used to describe medicines and other clinical information, such as diagnoses, procedures and therapies, in e-health systems;
  • Developing unique identifiers for individuals and healthcare providers as well as medicines and medical products;
  • Standardising the types and formats of health information to be collected in e-health systems;
  • Identifying a secure means of electronically transferring clinical information between authorised healthcare professionals;
  • Designing specifications for secure electronic health records;
  • Involving local and international standards organisations to support e-health implementation; and
  • Developing the business case for a national system of shared electronic health records to be presented to COAG in 2008.

Posted in Australian eHealth

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