Vic Management Interns' blog

Blog posts by Victorian Management Interns of the Australasian College of Health Service Management. Views are those of the individual authors and not those of ACHSM or management interns’ host organisations or employers.

Tais Lildaree
Tais Lildaree

Health Management Interns, ACHSM

Healthcare Procurement

Author: Rubin Ng

Date: May 23, 2016


Procurement? Isn’t that just buying products? This was the simplistic view I had till I started my rotation at Health Purchasing Victoria in Medical and Pharmaceutical Sourcing.

Health Purchasing Victoria (HPV) is a statutory authority accountable to the Minister of Health and to keep it short, the organisation assists public health care services to deliver high quality patient care by ensuring they have a reliable and agile supply chain.  Core functions include:

  • Partnering with health services to organise collective state-wide contracts for product purchases to achieve best value in the tender outcome
  • Providing advice and education on how to get the supply chain working at its best
  • Fostering improvements in use of systems and e-commerce
  • Sharing useful data with health services
  • Ensuring Victorian Government health purchasing policies and probity is maintained in the purchasing, tendering and contracting of public hospitals.


During my time here I have been involved in a number of contracts ranging from Dental Consumables to Continence Management Products.  I have been exposed to various aspects of the Category Management cycle under the guidance of a Senior Category Manager from first scoping a new opportunity or category to discussing strategy, to evaluation, negotiation, award and contract execution.  These contracts are worth millions of dollars and there is a lot of work which happens in the background that I have been involved in as part of a team, such as creating specifications, data analysis, supplier meetings, industry briefings, probity audits, health service site visits, sample evaluations and board papers!


However, the journey to finalising a contract is not as simple as picking the lowest priced product!  A multitude of other factors beyond price are considered such as impact on patient outcomes and experience, product quality, safety, standardisation, maintenance, waste, new innovations, and supplier performance to name a few.  HPV strives to achieve best value and one of the success factors can be attributed to Product Reference Groups (PRG) who are groups of clinicians and supply personnel from representative health services.


At HPV, I have seen the importance of the PRG and how the key to success is involving clinical staff in the choices and changes that will be made to what they purchase.  During the evaluation process, products which are awarded by the PRG are not always the cheapest because health services may have found through experience that these do not work or often replaced.  However, the product does have to be cost effective to be competitive.  The PRG also considers standardisation of products whilst considering current clinical evidence based practice.  The formation of Contract Management Groups after the contract has been executed is another way that HPV captures savings with products by finding new ideas from health service staff and monitoring quality and costs.  Through this link, HPV receives advice on trends, changes in clinical efficacy and products.  This two-way collaboration has been vital for HPV’s work and the relationship continues to grow stronger.


Improving health outcomes whilst delivering efficiency savings – now that’s what our health system needs; HPV makes it happen.  My belief is that more than ever, procurement has become strategic and the availability of big data analytics will influence contract design and category management.  The quest for best value for money in products or services whilst ensuring probity is never ending!

About the Author
Rubin is a 2nd Year Management Intern currently placed at Health Purchasing Victoria.  He holds a Bachelor of Pharmacy (Hons) from Monash University as well as a Master of Management from the University of Melbourne - Melbourne Business School.  He has previously worked for public, not-for-profit, private and consulting healthcare organisations.

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