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

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

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

5 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)

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

7 Framework Pre Award Tendering Post Award Procurement Payment Open Infrastructure (WP 8) eSignature (WP 1) eCatalogues (WP 3) eOrdering (WP 4) eInvoicing (WP 5) Virtual Company Dossier (WP 2)

8 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 for 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

9 Example Western Norway Health Authority December 3rd 2009, Western Norway Health Authority published a call for Tender in Tenders Electronic Daily (TED) Closing date : January, 25th 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….

10 Example 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 eCatalogues and eBusiness Refused to submit a tender due to uncertanty and risk

11 Efficiency Pre-Award WP2 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.

12 Framework Pre Award Tendering Post Award Procurement Payment Open Infrastructure (WP 8) eSignature (WP 1) eCatalogues (WP 3) eOrdering (WP 4) eInvoicing (WP 5) Virtual Company Dossier (WP 2)

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

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

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

16 Healthcare – SME`s healthcare manufacturers across Europe 80% of them are SME`s (Source: ) 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 !

17 Bigger Healthcare Suppliers Big multinational companies, have branches or subsidiaries in all major industrialized countries, which makes this aspect of eBusiness 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 eCatalogues eOrdering eInvoicing The European Healthcare market is fragmentet when it comes to eBusiness

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