eHealth for Sustainable

Healthcare Delivery

eHealth Procurement

Parallel Session PS 31

Thursday 18 March, 2010,

9:30 – 10:45

Giancarlo Ruscitti MD

Secretary General for Health & Social Services

Veneto Region

Background

• The process of innovation of the Italian Public Administration

system and the need for cost containment are key to

aggregated purchasing in the health care system at the central

level (for Veneto, at the regional level);

• 2 pre-requisites are: achieving high quality standards of

technical characteristics of the goods, and a market policy for

goods purchasing;

• The centralized purchaser at the regional level can be more

cost-effective in a competitive health market

4

The Veneto Region health care system: Health Care Providers and Professionals

• 21 Local Health Authorities• 2 Hospital Trusts

•1 Veneto Oncology hospital

PUBLIC ACCREDITED INSTITUTIONS 64

IRCSS (SPECIALIST RESEARCH

INSTITUTES)1

Public health authority (Az. Osp.) 2

Hospital in the Provincial capital 6

Network hospital / strong integration 33

Integrating hospital of the network 8

Polyfunctional health centres 10

Management experimentation 4

PRIVATE ACCREDITED INSTITUTES 14

Care homes/ hospital 19

Classified hospital 4

IRCSS (SPECIALIST RESEARCH INSTITUTES) 1• 41.806 Medical & Nursing staff• 11.702 Laboratory Technician

• 6.704 Administrative staff

• 117 Other Professionals

(* Veneto Regional Statistics Office data, 2009)

Veneto Region: Health expenditure

according to expense item (2009)

HC GOODS

9%

NON HC RELATED GOODS

1%

REGIONAL HC SERVICES

12%

EXTRA REGIONAL HC

SERVICES

2%

PERSONNEL COSTS

32%

PRIVATE SECTOR

SERVICES

31%PUBLIC SECTOR

SERVICES

1%

PURCHASES OF NON HC

RELATED SERVICES

7%

EXTRAORD.BURDENS

0%

OTHER COSTS

3%

FINANCIAL BURDENS

0%AMORTIZATIONS AND

DEVALUATIONS

2%

Total.Budget

9.1 Billion Euro a year

From a traditional procurement strategy in

Veneto in each of the 21 LHAs…

• Innovation in P.A. sets out to

simplify and modernize

purchasing processes;

• Centralized Purchasing

encourages the use of ICT

which establishes a common

language of codes and standards

among purchasing platforms

The “old” way

The Veneto Region is divided into

23 Purchasing Offices dedicated to

Health Care & Social Affairs

…to an innovative purchasing

strategy for the Veneto

A networked system of e-Procurement at the Regional level

• minimize costs and maximize outcomes among LHAs;

• spread examples of best practice and competence among central and regional Health Authorities;

• bring about economic savings, organizational benefits, and increase competition and transparency for suppliers.

Good Networking

The new way

Centralized Purchasing at the

Regional Level

• The aggregation of demand leads to a potential increase in the negotiating power between public purchasing departments and suppliers;

• Centralized Purchasing substitutes a host of often uncoordinated, decentralized administrations;

• The potential benefit is an improvement in the price-quality relationship through a higher level of competition among suppliers.

e-Procurement in the 5 new Areas

The Veneto Health System

is divided into

21 Local Health Authorities

and 2 Teaching hospitals

• Purchasing procedures

• Contracting for the Provinces

• Accounting

• Goods Storage

• Distribution of goods across the 7

Provinces

• Payments to suppliers

5 Areas

From 23 to 5 Centralized

Purchasing Centre

responsible for:

The Veneto Experience in Centralized

e-Procurement• 50 calls for tenders between

2007 – 2009

• Items (Centralized PC = Venice):

• Pharmaceuticals

• Vaccines

• medical devices

• 350M euro (Cost reduction of 26%

achieved by the Centralized

Purchasing Centre on the original

starting price of €478M)

The new strategy

Purchasing at the Regional leveleg. pharmaceuticals, vaccines, syringes, disposables, gloves, disinfectants, etc

Purchasing at the Area leveli.e. specific equipment serving hospitals in each of the

5 Areas

Purchasing at the single LHA leveli.e. all purchases that are not covered by the previous levels(because not considered cost-effective)

Purchasing using the procurement platform

at the Regional Level in the Year 2009

• Pharmaceuticals to the value of 230 M euro

• Drips to the value of 16 M euro

• Surgical needles and syringes to the value of 9 M euro

Purchasing using the procurement platform

at the Regional Level in the Year 2010

• Generic Drugs

• Drips and Syringes

• Vaccines

• Devices for urinary incontinence

• Estimated Value: 200 M euro

Conclusions

Centralized Purchasing at the Regional level has provento be effective for making consistent economic savings;

A reduction in purchasing tenders has been beneficialfor the organization of the Health Care System administration;

The positive results of greater competition and transparency has made it possible to convince localhealth administrators of the importance of centralizingpurchasing and eProcurement

Thanking you for your kind attention!

Dr. Giancarlo Ruscitti

Regional Secretary for Health & Social Services

Department of Health & Social Services

Veneto Region, Venice ITALY

giancarlo.ruscitti@regione.veneto.it