Healthcare providers save millions with e-trading

More healthcare providers sign up to save millions with e-trading gateway

An increasing number of DHBs and non-pharmaceutical medical suppliers are taking advantage of the substantial savings they can achieve through a specially developed industry-wide e-trading gateway.

From the initial commitment of two DHBs and three companies, use of the e-trading gateway has already grown to five DHBs and 22 key suppliers.

“The aim is that over 90% of public hospitals will be subscribed to the e-trading gateway by 2011,” says says Rohan Williams, President of the Medical Technology Association of New Zealand (MTANZ).

“As a national initiative, we estimate the e-trading gateway can deliver supply chain savings of between $21 million and $52 million across 21 DHBs in the first 18 months. As more hospitals join up, the number of range and choice of suppliers is expected to incrementally increase and the associated costs decrease even further, along with the added functionality now on offer. These savings can then be redirected to patient care.”

MTANZ spearheaded the development of the electronic trading gateway in response to a clear need among healthcare providers. Studies at three hospitals showed that, on average, every 100 purchase orders they issued generated 167 invoices rather than the expected 100.

“This inefficiency is indicative of how healthcare providers had to struggle through a maze of suppliers to find the products they need. Even if you look only at the costs of processing those unnecessary invoices, it’s massive,” says Williams. “It was clear that the healthcare providers could achieve substantial savings by streamlining the supply chain.”

MTANZ took on the mandate of assessing different software solutions, finally deciding on Australian company Pacific Commerce, whose Pacific Health Exchange network was already operating in the Australian health sector. To ensure strong on-the-ground support in New Zealand, Pacific Commerce partnered with local e-business provider Tranzsoft. Tranzsoft already had established eBusiness trading connections with Auckland DHB and other Government Agencies, so provided a perfect fit.

The electronic gateway offers a single-process layer that enables all software solutions used by both hospital and suppliers to interact without the need to develop individual interfaces. This means different health providers can order products from a range of suppliers through one portal, with the order relayed to each trading partner in a way that integrates with their own established software package. The services include data exchange, track and trace of consignment and loan equipment, electronic procurement and catalogue hosting.

“We believe we can achieve a situation where 100 purchase orders will only generate 100 invoices that can be processed at both ends without double handling,” says Williams.

“The ongoing pressure on DHBs to make savings has highlighted the potential cost benefits of automating supply chain processes As well as benefiting from savings, hospitals will be able to concentrate on being still more customer focussed as they regain the use of accounting staff who were previously tied up with double keying of data. In turn, suppliers will be able to reduce the amount of customer service interactions and utilise their own staff more effectively.”

ENDS