Creating More Efficiency in Healthcare Procurement Lars-Johan Frøyland

Creating More Efficiency in Healthcare Procurement Lars-Johan Frøyland, Malmoe, 9 th of February 2010

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Agenda Ø What differ Healthcare procurement from those of other industries ? Ø The importance of Product data in Healthcare procurement Ø How can PEPPOL infrastructure and PEPPOL deliveribels provide more efficiancy in Healthcare procurement ? 3

Healthcare Spending Europe 2007 – per capita Source: OECD Healthcare 2007 4

What differ procurement in Healthcare from other industries Healthcare is driven by quality Healthcare has both an International and National Dimension Healthcare is highly specific Procurement of Medical supplies Requires good Product Knowledge Source: Hübner & Elmhorst (2008) 5

Sources containing references to product data …in outcome reports …in clinical trails reports statistical data for specific department or hospital statistical data about treatment outcome …in medical records … on the web/in brochures product name, application, serial number, charge number… general features of the product – white papers etc. …in logistics documents Product Data… Item number, amount, location, destination, delivery date/time… … in catalogues item number (classified) product features, unit of measure…. …in orders and invoices …in contracts item number, price, amount, unit of measure… contracting parties, item, amount, services… Based on : ”Ebusiness in Healthcare” Hünber & Almhorst (2008) Springer, London 6

Framework Payment e. Invoicing (WP 5) e. Ordering (WP 4) Post Award Procurement e. Catalogues (WP 3) Virtual Company Dossier (WP 2) Pre Award Tendering e. Signature (WP 1) Open Infrastructure (WP 8) 7

Efficiancy Pre-Award The public hospitals procurement organisations need a broad competition on published tenders, to deliver best value for money. Normally only domestic suppliers submit tenders A major hurdle foreign suppliers (especially SME`s) is to understand what evidence they have to provide in order to comply with the selection and exclusion criteria set out in the call for tender. Due to lack of relevant catalogue standards, confusing excists among foreign suppliers when a public hospital in a memberstate calls for a tender 8

Example Western Norway Health Authority December 3 rd 2009, Western Norway Health Authority published a call for Tender in Tenders Electronic Daily (TED) Closing date : January, 25 th 2010 Medical Microbiology (immunoassays for the diagnosis of infectious and autoimmune diseases) 4 foreign suppliers and 2 domestic suppliers responded interest for the tender By closing date only the 2 domestic suppliers submitted their offer – no offers from abroad…. 9

Example www. ravo. de Small German In Vitro Diagnostic company, founded in 1995 Asked for help : - Could not understand what evidence they had to provide in order to comply with the selection and exclusion criteria set out in the call for tender - Could not understand the Norwegian requirements regarding e. Catalogues and e. Business Refused to submit a tender due to uncertanty and risk 10

Efficiency Pre-Award WP 2 in PEPPOL aims to provide a ”Virtual Company Dossier” The VCD tool will support any authorised enteties in creating an electronic information package consisting of required documentaion, evidences, proof, attestations certifications etc. If PEPPOL is successful in delivering such a tool (European VCD Service) it will potentially open ut the European market for SME`s to submit tenders cross borders, hence increase the competition in public tenders. 11

Framework Payment e. Invoicing (WP 5) e. Ordering (WP 4) Post Award Procurement e. Catalogues (WP 3) Virtual Company Dossier (WP 2) Pre Award Tendering e. Signature (WP 1) Open Infrastructure (WP 8) 12

Efficiency Pre-Award The lack of standards required for creating pre-award e. Catalouges, including standardized machine-readable product descriptions, leads to inefficiency and higher product prices (Brüggemann F. 2008) WP 3 in PEPPOL is working on the e. Catalogue issues. It PEPPOL deliver standard building blocks to a pre-award e. Catalogue they will highly contribute to made the tendering process more efficient to both the supplier and the buyer ! 13

Efficiency post-award …in outcome reports …in clinical trails reports statistical data for specific department or hospital statistical data about treatment outcome …in medical records … on the web/in brochures product name, application, serial number, charge number… general features of the product – white papers etc. …in logistics documents Product Data… Item number, amount, location, destination, delivery date/time… … in catalogues item number (classified) product features, unit of measure…. …in orders and invoices …in contracts item number, price, amount, unit of measure… contracting parties, item, amount, services… Based on : ”Ebusiness in Healthcare” Hünber & Almhorst (2008) Springer, London 14

Efficiency post-award …in outcome reports …in clinical trails reports statistical data for specific department or hospital statistical data about treatment outcome …in medical records … on the web/in brochures product name, application, serial number, charge number… general features of the product – white papers etc. …in logistics documents Product Data… Item number, amount, location, destination, delivery date/time… … in catalogues item number (classified) product features, unit of measure…. …in orders and invoices …in contracts item number, price, amount, unit of measure… contracting parties, item, amount, services… Based on : ”Ebusiness in Healthcare” Hünber & Almhorst (2008) Springer, London 15

Healthcare – SME`s 11. 000 healthcare manufacturers across Europe 80% of them are SME`s (Source: www. eucomed. be ) Cross-boders electronic business makes only sense for those companies with no sales representatives in other countries SME`s are striving to gain market share and targeting the international market without having the resources to establish a large sales force in each country = PEPPOL focus ! 16

Bigger Healthcare Suppliers Big multinational companies, have branches or subsidiaries in all major industrialized countries, which makes this aspect of e. Business less relevant for them. For them, the benfit of PEPPOL is to have a uniform approach to the European market as a whole, not fragmented per country as the situation is today - e. Catalogues - e. Ordering - e. Invoicing The European Healthcare market is fragmentet when it comes to e. Business 17

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