DHB gains with deal on supplies

03:07, Jan 20 2014

Frontline health services in Marlborough will benefit from the Nelson Marlborough District Health Board's moves to centralise finances and adopt combined purchasing for supplies.

DHBs agreed in 2012 to centralising operational finances, purchasing and goods supply.

Communications and engagement manager of Health Benefits Ltd, Mark Reynolds, said mounting financial pressures meant working with DHBs to manage costs was beneficial.

A partnership to reduce administrative, support and procurement costs supported a cost-effective health service.

"The savings go back into supporting frontline health services."

Health Benefits is a Crown-owned company established in 2010 to help DHBs nationwide reduce procurement, administration and support costs.


Nelson Marlborough DHB chief executive Chris Fleming said its procurement had been mostly at a national level. They dealt with national and international suppliers of clinical products and specialist goods.

He was not aware of any regional businesses that would be significantly affected by the combined purchasing, which would bring substantial savings to DHBs around the country.

Mr Reynolds could not confirm if Marlborough businesses would "lose out" under the new regime.

There could even be an opportunity for businesses to benefit from the programme, he said.

"Requests will still be placed for goods and services by people at Nelson Marlborough DHB and will still be paid for by the DHB's funds."

However, requests would be processed on one system, which would reduce transaction costs and give greater transparency and visibility to purchasing by DHBs.

The information could then be used to plan the purchasing more efficiently, which could benefit Marlborough businesses that provided or supported those services, he said.

Businesses' products were available on the DHB National Catalogue. Health Benefits could not provide catalogue information publicly, including local supplier information, because of commercial sensitivity.

Mr Reynolds said savings had come from offering collective contracts for bulk purchases of items that all or most DHBs were buying from the same national suppliers.

DHBs spent almost $5 million a year on non-sterile examination gloves. There were only two manufacturers worldwide of the non-sterile gloves used in New Zealand DHBs, but HBL identified 18 suppliers to all 20 DHBs.

"Each of those providers offered a large variety of prices for the same products they supplied. HBL worked with DHBs to arrange national supply contracts at the same price for all DHBs. [They] are set to save more than 30 per cent a year on these supplies - or about $1.7m."

The Marlborough Express