Procurement strategies and processes for health
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Transcript of Procurement strategies and processes for health
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PROCUREMENT STRATEGIES AND PROCESSES FOR HEALTH Janos Bertok, Division Head, Public Sector Integrity
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• Governments spend 29% of total general government spending on public procurement
• Health: second largest spending area (around 9% of GDP; ranges from: 17% in the US and 5% in Turkey)
Challenge: generate savings and ensure high-quality and efficient goods and services for a competitive price
• OECD is working with health institutions to improve their public procurement processes
(examples: PP reviews of the Mexican Institute of Social Security and the State’s Employees’ Social Security, ISSSTE and the Social Services Institute in Mexico, IMSS)
Public Procurement and the Health sector
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• Lack of clear and comprehensive PP strategies in some countries
• Lack of appropriate collection of PP data
• Knowledge and capability deficiencies that hinder the development of an efficient procurement function
• Lack of market intelligence and engagement with suppliers (via debriefings for example)
• Need for strengthened use of competitive tendering (versus direct awards)
• Challenges related to planning and coordination with regional / sub-national levels?
What are the main challenges and constraints
in the health sector (Lessons from reviews)
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• Support the transformation of procurement from an
administrative task to a core strategic instrument (the
2015 OECD Recommendation on Public Procurement)
• Concrete action plans and recommendations, which form
a comprehensive view, have given first results:
• IMSS: Streamlining public purchasing, consolidation of
therapeutic goods and use of reverse auctions
savings of 700m Euros a year (approx. 13% savings).
• ISSSTE: Consolidated healthcare purchasing
savings of 134m Euros from 2013 to 2015 (approx.
12.70% savings)
From vision to results
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• PP can also achieve Innovation as policy objective, according to
the ongoing OECD Survey on Strategic Innovation Procurement:
– Public purchasing is getting from a more limited administrative
procedure towards a ‘smart’ procurement management (example:
existence of Innovative Procurement Action Plans)
– Main Sectors of Organisations having sent Good Practice Cases,
including the health sector.
Strategic Innovation Procurement,
unlocking the potential for Health (I)
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Strategic Innovation Procurement,
unlocking the potential for Health (II)
• Two examples of Good Practice Cases sent by OECD Countries:
‘Robotic Bedwashing Facility’
Erasmus University Medical Center, Netherlands
Robotics based bed washing system
Innovation Procurement Project www.ecoquip.eu
Winner of the European Public Procurement
of Innovative Solution (PPI) award 2014
http://www.innovation-procurement.org/award/
erasmus-mc
‘Digital Locking’
Smart digital locking system in hospitals, Finland
With the digital locking system developed by
iLOQ the public sector has saved a lot of money
and improved safety and energy-efficiency.
http://www.iloq.com
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The role of Central Purchasing Bodies (CPBs)
Source: 2014 OECD Survey on Public Procurement
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Ireland
Under Ministry:28.1%
Government Agency:
43.8%
No CPB:12.5%
State-owned Enterprise:
15.6%
• CPBs: increased potential as market player through aggregation,
efficiencies and realising policy objectives
• Most OECD countries have CBPs, but legal
status differs among countries (see figure 1)
as well as their roles (see figure 2)
• Impact of CPBs reported to the OECD:
Better price of goods and services
Lower transaction cost
Improved capacity and expertise
Increased legal, technical, economic
and contractual certainty
Greater simplicity and usability
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The role of Central Purchasing Bodies 2
Role(s) of CPBs
Source: 2014 OECD Survey on Public Procurement
79%
79%
29%
36%
0% 20% 40% 60% 80% 100%
CPBs act as manager of the national system awardingframework agreements or other consolidated
instruments, from which contracting authorities thenorder
CPBs act as a contracting authority aggregating demandand purchasing
CPBs establish policies for contracting authorities
CPBs coordinate training for public officials in charge ofpublic procurement
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www.oecd.org/gov/ethics/integrityinpublicprocurement.htm
For more information on OECD work on public
procurement and integrity
www.oecd.org/competition/bidrigging
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