Hospitals to hear e-procurement benefits

Anthony Doesburg, Auckland. Acknowledgements to COMPUTERWORLD

Five suppliers taking part in pilot.

E-procurement momentum is building in the health sector as participants in an Auckland trial set about selling the benefits to further suppliers and buyers. HealthAlliance, a shared services body catering for Waitemata and Counties Manukau district health boards, has been taking part in an e-procurement pilot for about a year.

Procurement manager Warren Sharp says while hard data on the system's financial benefits isn't available, there's "no question" of its merits.

He will be attempting to persuade eight other North Island hospital boards of the benefits at a meeting in Auckland today. The boards belong to an informal grouping called the Health Supply Network.

Last month Sharp made a similar presentation to the Medical Industry Association (MIA), which represents suppliers of medical products.

According to MIA president Rohan Williams, the presentation at the association's annual conference resulted in expressions of interest by a dozen suppliers in joining the health exchange. Five suppliers have been taking part in the pilot.

"We have a target of 20 to 30 by year's end, which is looking achievable," Williams says. "It's a critical mass thing; if we're going to go out to hospitals, we need some reasonable numbers signed up."

The exchange, which the MIA has been working on for more than two years, is being run as a joint venture between Sydney-based Pacific Commerce and Auckland company Tranzsoft. Tranzsoft has created a secure transaction gateway, which is also handling e-procurement on behalf of the Police, Defence Force and Auckland District Health Board.

Tranzsoft earns a transaction fee and charges from $500 to $3000 to "map" buyers' purchase order data with suppliers' systems.

"Our gateway has a very sophisticated intermediate file set," says Tranzsoft general manager Rod Hall, which seamlessly ties buyer and supplier accounting systems together. "It's all our own intellectual property; we've quietly spent three or four years working away at it."

HealthAlliance's Sharp says connecting to the exchange has not been a major IT undertaking, although there were firewall problems that it needed to work around.

The clearest benefit of e-procurement is in streamlining data entry processes associated with purchase orders and invoices. HealthAlliance is yet to implement electronic invoicing, needing to write an interface between invoices received from the exchange with its Oracle ERP system.