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Insights on healthcare procurement today and in the future

Updated: Feb 25, 2022

Bill Porter, Healthcare Procurement Leader with extensive experience spanning over 35 years and part of the August Consulting team, has shared some insights on how he sees procurement today and in the future

Bill Porter Healthcare Procurement Leader

Bill, what do you think are the top priorities that organisations should focus on in terms of procurement?

In my experience, the company culture and business strategy, including procurement objectives, must be clearly understood by all levels within the business. If the Procurement team is to achieve its objectives, it must have full Executive support and be empowered to implement the required strategies.

Too many organisations have business objectives in place but don’t have the company culture or support required for the procurement team to enforce the strategy.

What is healthcare procurement currently doing well in, and where is there an opportunity to grow?

Healthcare procurement organisations are great at ensuring their customers get what they need when they need it.

They are also good at quickly resolving supply chain issues, caused by things like product recalls, that have the potential to disrupt the business. They are probably not as good at asking the right questions on why certain products are used or implementing a detailed product evaluation process to gain acceptance of alternative products that can reduce cost and risk but not impact clinical outcomes.

I think growth will come when procurement teams have the skills and resources to actively engage with clinicians so that they can see that the key business goals will ultimately have a positive impact on patient outcomes.

What do you think needs to be done about the current global supply chain issues?

Firstly, there is a need to have a much better understanding of your major suppliers' supply chains and what they are doing to mitigate future risk. Covid has highlighted that hospitals cannot be totally reliant on suppliers to have appropriate strategies in place to mitigate Force Majeure type events like pandemics, natural disasters etc.

For certain product categories like PPE, there may be a need to move to a more strategic relationship with the supplier, that includes guaranteed access to an agreed volume of product at any time. This could take the form of an agreed amount of bulk product stored and managed by the supplier and held at suitable locations. This bulk product would be used to supply normal demand and then replenished as required so that stock obsolescence could be managed.

This is different to typical stockpiling, as the supplier still owns the stock and the customer would have a marginal increase in price to cover funding costs etc.

Given your global experience, what do you think we can learn from other industries, and how can we apply those learnings to procurement in Australia?

It is difficult to compare healthcare to other industries as it is fairly unique in the way the end users have a high level of control over the products used. Australia only has a very small percentage of global demand but still maintains a high level of choice, which generally means higher pricing. Other countries and industries have learnt to rationalise product selection to maximise buying power and reduce cost, without compromising quality.

In your view, how do you make procurement “better”?

I think historically, procurement has been seen just as a service provider. Improvement will come when end users see procurement as a resource to make their operations more efficient and improve outcomes rather than just try and cut cost.

What is your favourite part of your current role so far?

Having the opportunity to look at other businesses and using my experience to help them find the solutions they need to achieve their business improvement objectives.

What is your favourite “life quote”?

“If you really want to do something, you'll find a way. If you don't, you'll find an excuse."

-- Jim Rohn


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