HSV Procurement Activity Plan highlights savings and benefits

HealthShare Victoria’s (HSV’s) first review and update of the Procurement Activity Plan (PAP) has shown that working closely with Victoria’s public hospitals has helped to deliver $6.8 million in cost reductions for our health service customers so far this financial year. While procurement activities are behind schedule due to the COVID-19 pandemic, our savings and benefits are ahead of expectations.

Key points

• $6.8 million in cost reductions have been delivered to our health service customers so far this financial year.
• HSV has completed fewer procurement activities than forecast due to the COVID-19 pandemic.
• The refreshed FY22 PAP for the period from January 2022 to December 2023 is available on the HSV website.

In the first half of this financial year, HSV will have completed fewer procurement activities than forecast due to the pandemic requiring both health services and HSV to focus their efforts on the response effort.

“Even though nine of our procurement categories have been extended due to COVID-19, we are tracking to deliver $159.8 million in savings and benefits this financial year, including $25.3 million in cost reduction, which is above what we have forecast for the year,” says HSV Director Procurement Joe Neill.

“As we know, Victoria was in lockdown for more than three months, which affected our ability to hold on-site product evaluation meetings and slowed our delivery of the PAP.

“Importantly though, we were able to continue supplies of critical products and services during this period.”

COVID has meant HSV’s teams have been deployed to improve supply surety and sourcing, ensuring health service access to rapid antigen testing products and an additional 40 million N95 masks to support their pandemic response.

HSV launched the revamped PAP in July 2021 to increase sector engagement and consultation and provide greater visibility of our planned activities. The extended PAP covers 24 months and has an in-built six-monthly review to better align with the health sector and allow for more agile sourcing.

“Early engagement with health services is important to align priorities, achieve mutual goals and help HSV identify opportunities in time to plan and incorporate them into our process,” says Joe.

To ensure the PAP remains up-to-date, it is refreshed every six months with information on what has been delivered and what has changed since the last version, with planned activities contributing to a strategic objective to deliver $838 million in benefits and savings by 2025.

Completed activities over the past six months include:

• Six activities as planned including a Greenfield, two Brownfields, a Supplementary and two Options.
• An additional Supplementary activity in Continence Management products to address a clinical need.
• The Brownfield category of Language Services, although later than initially planned.
• Two strategic extensions to align timing to a broader category plan.

The updated PAP provides an additional six months of planned activity based on health service feedback gathered following the last PAP presentation.

The refreshed FY22 PAP for the period from January 2022 to December 2023 and is available on the HSV website. It outlines 23 new activities to be completed during this period, including an additional 15 opportunity assessments as recommended by health services:

• Brownfield: Eight new activities where the existing contract is coming up for renewal with an expected $7 million in ongoing annual benefits.
• Secondary group buy: Eight categories where HSV is able to assist with secondary group buy activities, delivering an anticipated $8 million in annual benefits.
• Opportunity Assessments: 15 activities where HSV is seeking health service input on their level of interest and annual spend. Eight of these have arisen directly from health service feedback on the previous PAP review.

A further six activities have been added to commence in calendar year 2024 that will require health service input in calendar year 2023.

Should you wish to discuss the PAP review or any other procurement matters please contact your Customer Relationship Manager or the HSV helpdesk at helpdesk@healthsharevic.org.au or 03 9947 3900.