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Tuesday, January 13, 2009

The Glacial Saga of e-Procurement in Health in Australia.

A little background.

“On 8 December 2005 the NEHTA Board, consisting of the heads of all Australian health departments, approved the implementation of a National Product Catalogue on EANnet, hosted by GS1 Australia.” – Source NPC Industry News June 2006.

And now we have this announcement.

Health e-procurement goes live

19 December, 2008. WA Health has implemented the NEHTA e-Procurement solution developed for Australian governments’ health purchasing.

The solution was kicked off with Health Corporate Network (HCN), a shared corporate service providing human resource, finance and supply services to WA Health, and global medical products and services company, Baxter Healthcare.

Robyn Richmond, Manager Strategic Development, HCN said e-procurement was key to improving efficiencies in government health purchasing. “NEHTA’s e-procurement solution provides significant efficiencies in the sector which is also an important step in meeting the e-health requirement for unique product identifiers which impacts safety and quality outcomes in patient care,” she said.

The NEHTA e-procurement solution recommends best practice methods of transacting utilising established standards such as GS1xml messaging. It relies heavily on clean, uniquely identified, product data held in NEHTA’s National Product Catalogue (NPC). The NPC is the primary source of purchasing data for all health departments in Australia and is hosted on GS1 Australia’s GS1net.

NEHTA Chief Executive, Peter Fleming, said that the e-Procurement solution is an example of the kind of collaboration required to make e-health a reality for Australia. “It’s great to see the public and the private sector working together to achieve common goals. The e-Procurement solution will present efficiencies for all involved,” he said.

Baxter Healthcare was one of the first suppliers to populate the NPC and is now the first company to trade electronically with any state or territory using the NEHTA e-Procurement solution.

Ken Nobbs, Program Manager - Medical Products, NEHTA maintains that by using a single procurement solution for health supply purchasing, huge safety and quality improvements and cost efficiencies will be realized across the sector.

“A standardised catalogue like the NPC reduces the chance of introducing erroneous data into these transactions and the errors and costs these cause” he said “This is particularly important in the healthcare supply chain where getting the right products at the right place and time can be critical to ensuring quality patient treatment,” said Mr Nobbs.

Looking ahead HCN is now planning to work closely with other suppliers that have populated the NPC to engage in system to system transacting through the NEHTA e-Procurement solution.

Source of release is here:


Glacial is the word to describe the progress on all this. Some three years after the initial decision – and some 18 months after the National Product Catalogue (NPC) was to populated it does not yet seem to be done.

From a December 2006 FAQ document from NEHTA we have:

“What is the deadline for populating the NPC?

30th June 2007 is the date suppliers are asked to have their product information uploaded to the NPC. Jurisdictions are relying on the data from the NPC to progress to e- Procurement. Some jurisdictions are already accessing and using the NPC data. Others are expected to be using the data within the next few months.”

It is of note that this announcement only covers one vendor and not the full gamut of WA Health purchasing. One can be sure that is a way off yet.

More worrying is that in NSW they are developing what appears to be a parallel state catalogue to the NPC. See here:


I think after three years it might be an idea to conduct a little audit of just how successful the overall Supply Chain initiative is and what might be done to actually get it fully implemented. This sort of work can save a lot of money and time and should be a high priority for completion.

On a related matter the Australian Catalogue of Medicines (ACOM) seems to have gone very quiet lately. It would be interesting to know where it is up to – given it is not longer mentioned in the list of current supply chain documents.

It seems to me we could all do with a 2-3 page review from NEHTA as to where things were actually up to, what problems were being encountered and how they were being addressed.

It is, of course, important to recognise none of this is actually totally easy! The following from the UK shows how more than Australia struggles a little!

NHS procurement systems are 'wasteful and block innovation'

Think tank claims health service could save £2.1bn a year

By Mike Simons, Computerworld UK

Procurement policies in the National Health Service are hindering the uptake of new technology and working practices, according to a new report.

The poor adoption of new technology was “one of the reasons our standards often fall below those of comparable countries", said the report titled All change please from think tank The Policy Exchange.

The study, based on detailed interviews with UK and US health care professionals, takes a swipe at the National Programme for IT (NPfIT) in the NHS, which is driving through a £12bn computerisation project.

More here:


This said, it is still up to those who are responsible to be really pushing on as we know the savings are there!



Anonymous said...

The Aust Catalogue of Medicines no longer exists but has 'morphed' into the Australian Medicines Terminology (AMT). Numerous versions have been released by NEHTA and as far as I am aware the AMT currently includes all products listed on the Pharmaceutical Benefits Scheme. Work continues to include all Australian registered medicines. Details at: http://www.nehta.gov.au/e-communications-in-practice/emedication-management

Anonymous said...

The NPC project provides a prime example to demonstrate “How the states should be cooperating and collaborating to deliver one STANDARD NPC system for the nation.

It is not clear whether WA and NSW are on the same page.

There are a number of issues here which need to be clarified.

1. What is the ‘Standard’?
(a) Is it a NATIONAL Product Catalogue (NPC)?
(b) Is it an end-to-end eProcurement Solution?
(c) Is it a combination of both?

2. Who is putting up the money and how much are they each contributing to what parts of the project?

3. Who owns the IP to 1.(a), (b), (c)?

4. Who is ‘implementing’ the system?
(a) Is it NEHTA?
(b) Is it the respective State Jurisdictions?
(c) Is it Baxter in WA and Sterling Commerce in NSW?
(d) Is it a joint collaborative effort with clearly specified predetermined understandings around ownership, licensing, revenue splits and maintenance and support responsibilities?

The NPC, as its name suggests, is a NATIONAL PRODUCT CATALOGUE and there should be only ONE STANDARDISED VERSION of the NPC available in the market at any one time.

NSW and WA should both be using the ‘Same Version of the NPC” which should contain the necessary enhancements to meet the needs and idiosyncrasies of each state respectively.

Is this the case? Are WA and NSW using the same NPC and the same Version of it?

Moving on to the ‘eProcurement solution’.

We could quite feasibly have a situation where different eProcurement Solutions will emerge in the market developed by various medical and products services companies - such as Baxter in WA and Sterling Commerce in NSW. Under these circumstances both Baxter and Sterling should be populating the NPC and accessing it to feed their respective proprietary eProcurement supply chain solutions.

Is this how NEHTA intends a national eProcurement solution will evolve or does NEHTA envisage a ONE only national eProcurement solution being implemented and used by all jurisdictions with which Baxter, Stirling Commerce and others will interface their proprietary solutions to drive their own internal processes?

Dr David G More MB PhD said...

Maybe NEHTA should respond to all this? Might be something their specialists could engage with?


Anonymous said...

That's a good suggestion and perhaps you should pass it on to the appropriate person at NEHTA asking for a response.

Basically, the jurisdictions have an obligation to NEHTA and to the taxpayer to collaborate with each other and to ensure that unnecessary duplication of effort and duplication of projects is avoided absolutely.

NEHTA has a tough enough job to do as it is, without being hampered in the process by lack of coordination and collaboration between the jurisdictions.

Whatever the situation NEHTA will get brownie points if it is able to give you a fair and frank response and say it as it is, free of spin. If there are some issues that have gone off the rails they can be fixed. It shouldn't be surprising if there are quite a few given the turbulent time NEHTA has had over the last few years. But things have changed, and this may be a good starting point to demonstrate just that.

Anonymous said...

Have you noticed that the 19 December 2008 media announcement "WA Health has implemented the NEHTA e-Procurement solution developed for Australian governments’ health purchasing" appears on the NEHTA web site.

By contrast the 15 December 2008 media announcement "Sterling Commerce, an AT&T Inc company, today announced it will supply a standards-based e-procurement hub solution to the New South Wales Department of Health (NSW Health)" does NOT appear on the NEHTA web site.

Your commentator of Wednesday, January 14, 2009 6:13:00 PM makes some important observations and raises questions which only NEHTA can clarify.

If both these projects demonstrate full support for NEHTA's directions, and if they both demonstrate full collaboration and coordination between NSW Health and WA Health, and if they both openly receive NEHTA's full support we should all be very well pleased. Only NEHTA can tell us if this is so and it is important that it does so. If it is not so then the states need to quickly rethink what has to be done to get fully behind NEHTA.

Anonymous said...

The following should clarify some of the issues for your readers.

There is no suggestion here that NEHTA will provide hub services. NEHTA envisages multiple hubs being available with the hubs connecting with each other via a set of standards known as the hub interconnect.

Obviously a highly critical part of the entire scheme is the NPC which NEHTA is developing. The company that administers the NPC is GS1 Australia as per NEHTA’s Industry Announcement dated 30 June 2006.

For further information on E-Procurement refer to NEHTA’s E-Procurement Business Architecture Supply Chain Version 1.0 – 12/07/2007 Final.

An extract from the Executive Summary is provided below.

Executive Summary

The goal of E-Procurement is to replace existing paper-based documents used in purchasing goods for the Australian Health sector by the exchange of electronic documents in the context of business processes shared between buyers and their suppliers, and facilitated in some cases by hub service providers.

The architecture identifies three major roles in e-procurement: buyer, supplier and hub. Buyers and suppliers may exchange documents directly by invoking
Web Services that the other party implements. However, in many cases hubs will be used between the two parties exchanging documents.

Hubs provide the following primary services: store and forward, and document translation. Store and forward allows for the case where suppliers are not continuously connected to the internet, and wish to retrieve documents in batches from time to time. Document translation allows suppliers to receive documents in a format different from the standard format sent by a buyer.

The architecture allows for multiple hubs to be used, and it assumes that each buyer and supplier connect to a single hub for exchanging all documents that
are not sent directly to trading partners. If a buyer wishes to trade with a supplier connected to a different hub from itself, the two hubs will forward messages between one another in what is known as a hub interconnect.

All hubs that wish to provide services to the health procurement community must be capable of implementing the standard interfaces and message types
specified in the E-Procurement Technical Architecture [EPTA2007], and they must agree to use this mechanism to interconnect with other hubs free of charge.

Anonymous said...

Very interesting but how will enforcement take place around the principle:-

"All hubs that wish to provide services to the health procurement community must be capable of implementing the standard interfaces and message types specified in the E-Procurement Technical Architecture [EPTA2007], and they must agree to use this mechanism to interconnect with other hubs free of charge"?

What is the enforcement process?
Who will enforce it?