The Future of Procurement in Health Services

John Swords

Head of Procurement HSE

National Healthcare Conference

Wednesday, 20th March, 2013

An organisation of over 100,000 people, who run all of the public health services in Ireland. The HSE managesservices through a structure designed to put patientsand clients at the centre of the organisation 

Who’s Who – The HSE

HSE Procurement is responsible for strategic

sourcing, purchasing, storage and distribution

of HSE goods and services to optimise

efficiencies and achieve best value for money

in the delivery of patient care.

Who’s Who – HSE Procurement

HSE Procurement Vision

“Everybody will have easy access to high quality procurement services that they have confidence in and that

procurement staff are proud to provide”

HSE PROCUREMENT STRATEGY

Improved Patient CareQuality & Cost Benefits

Customers

Suppliers

Enabling people lead healthier and more fulfilled lives

Staff Development & Training

Supplier Relationship Management

Communications, Customer Relationship Mgt.

Business Support & Enabling Technology

Portfolio & Category Management

(Strategic Sourcing)

Logistics & Inventory Management

(Operations)

Achievements -HSE Procurement

National Model to Support Procurement in HSE is a key enabler in achieving

1. Cost Reduction

2. Increased efficiencies

3. Streamlined standardised procurement processes

4. Minimising duplication of effort

5. Compliance with Regulations

Cross public sector verification process Independent verification process set up by PSA

Implementation Board

> HSE Procurement selected for Health to

participate on a cross public sector verification

process

> Audited and validated HSE Procurement

achievements through an independent

verification process by Grant Thornton.

Efficiencies and Value Delivered to date Against a backdrop of a 8.3% decrease in staffing levels across Procurement and a loss of expertise – savings achieved: €44.665m - 2010 / €74.045m - 2011 / €50m - 2012

Head of ProcurementJohn Swords

Asst Nat DirPortfolio & Category

Management

Brendan White

Asst Nat DirLogistics & Inventory

Management

Brian Long

Asst Nat DirBusiness Management Unit

Julie Ryan

Asst Heads of Portfolio & Category Management

Professional Services, ICT, Office

Equipment, Laboratory, Diagnostic

Medical, Surgical, Pharma

Hotel Services, Utilities

Asst Heads of Logistics & Management

HSEDublin NE

HSEDublin Mid Leinster

HSE South HSE West

Michael Driscoll

Vacant Post

Martin Quinlivan

Joe Redmond

Eddie Hogan

Francis Mollen

Stephen Lynch

Brendan Shovlin

Procurement Leadership Team

Portfolio & Category Management

€3 Bn. Contractible Expenditure

Determines the level at which the HSE– should manage each category– enter the market

Describes how specific categories will be contracted

Objective of the category strategy– Determine opportunities in the supply market– Level of aggregation– Contracting approach– Performance requirements, service level requirements and logistics approach

Planned, proactive and continuous engagement with the customer and supplier community

Governed by EU procurement rules and HSE Procurement Policy

Medical, Surgical & Pharma

Hotel Services & Utilities

ProfessionalServices, ICT & Office

Equipment, Lab&

Diagnostics

Prof Services Insurance Train & Dev Trans & Travel ICT Office Furniture

Laboratory Imaging Diagnostics Medical Equip Surgical Equip General Plant Physics & Bio Med Vehicles Medical Gases

Aids & Appliances

Surgical Orthopaedic Renal Dialysis Drugs &

Medicines Vaccines Hygiene

Continence Ophthalmic Cardiology

Foodservice Janitorial Products Utilities Restaurant & Kitchen Clothing & Textiles Facilities & Property

Mgt Continence Waste Management

Logistics and Inventory

Management

New model for Logistics & Inventory Management within HSE

Comprehensive Review resulted in the following recommendations:

• Increase level of management of stock at point of use (POU)

• Consolidation of fragmented stores infrastructure into a National Distribution Centre distributing to 9 Hubs

• Implementation of appropriate supply channels

NDC & Hubs

Procurement related communications internal & external

Internet & Intranet Homepage: www.hse.ie/eng/about/Procurement/

Procurement related training and up-skilling requirements to support staff

Business Support in respect of procurement – for example * National Catalogue * Development of electronic contracting information

Customer Relationship Management

Supplier Relationship Management

BusinessManagement

Unit

Shared Services - HSE

Liam Woods – Director of Shared ServicesNew arrangements for the future health service require radical change in the way we approach the provision of shared or common services to meet the needs of all parts of the health system

The financial challenges we face mean that we must take advantage of any opportunity for increased value in the way we provide such services

Reduce Duplication

Shared Services includes such areas as Procurement, Estates, Operational ICT, Accounts Payable and Payroll plus a range of other services provided through common platforms, either internally by our own staff or by external service providers

The National Procurement Office

Government commissioned Review of Public Sector Procurement undertaken by Accenture

Key Recommendation - Development of National Procurement Office

- Appointment of a Chief Procurement Officer - Sector Leads concentrating on aggregation of

spend across all Government Departments

Setting the Scene

Capacity and Capability Review of Central Procurement Function means

One voice for Procurement at government level supported by one voice at sectoral levelCommon Categories cross sector to be managed through National Procurement Office i.e. to establish a single integrated procurement function accountable for policy, sourcing and category management of common categories and support operations

NPO Structure

The Future of Procurement in Health Services

Shared Services

Requirement to provide service by way of Service Level Agreements to

* Trusts / Community

Operational managed assistance

Service / Clinical managed assistance

Working with the NPO

Ways of Working..

Health will manage health specific categoriesNPO will manage categories of goods and services that have high levels of standardisation commonly used across all sectors with multiple users, e.g. stationery and office suppliesCollaborative Stage where it is possible we will lead out on some of the areas of NPO being best placed to do soPurchase to Pay – Logistics remain within organisationManagement of Contracts remain within the sectorPossibility of migration of staff from Health to NPO but important for Health to maintain strategic sourcing

Conclusion

HSE Procurement has a role on Transition from Sector to National

Plan due for Government April 2013 to be approved

Outsourcing / Assistance

Health has work to do with major change to initiate – focus now on achievements and benefits attained by HSE Procurement to date and ensure a consistent

approach for the future