HSV statewide contracts help deliver health service savings and benefits in FY21

HealthShare Victoria (HSV) is on track to deliver savings and benefits this financial year valued at more than $140 million for the health sector, despite a difficult operating environment due to the COVID-19 pandemic.

Key points:

• HealthShare Victoria (HSV) is on track to deliver savings and benefits this financial year valued at more than $140 million for the health sector.
• HSV’s 67 statewide supply agreement available for health services include 10 new contracts established this financial year.
• HSV categorises health service benefits into three types; cost reduction, cost avoidance and further opportunity.

HSV’s 67 current statewide supply agreements available for health services include:

• 57 established supply agreements, including 24 contracts extended this financial year
• 10 new statewide contracts established this financial year.

These agreements represent an estimated $1.2 billion in total value under contract.

“HSV is forecast to exceed our savings and benefits target for this year despite the challenging conditions we have seen in the last 12 months” says HSV Director Procurement Joe Neill.

“Our indirect products and services, medical equipment and pharmaceutical contracts have helped health services to continue to provide health care services for their patients,” he says.

It’s a good foundation for our five-year savings and benefits target of $838 million,” says Joe.

The 10 new statewide contracts, including sterilisation consumables, pharmaceutical supplementaries and cranial neurosurgery prostheses, will deliver an estimated benefit of $13.6 million the 2020-21 financial year.

All new HSV contracts are established through a process involving reference groups with health service representatives, working parties and other advisory forums that is overseen by an HSV governance structure that also includes key health service representatives. Health service input, clinical guidance and support are essential parts of the procurement process.

HSV’s benefits reporting framework categorises health service benefits into three types:

• Cost reduction – e.g. achieving savings on products and services either as a once off or for a 12-month period.
• Cost avoidance – savings identified as per cost reduction after the initial 12 months.
  
• Further opportunity – savings that could be realised if a health service were to choose a different (but clinically equivalent) product from an HSV contract.  

For more information about HSV contract agreements, please visit www.healthsharevic.org.au.