Identifying aggregated purchasing opportunities

Abstract

The New Zealand public health sector comprises 20 independent District Health Boards (DHBs), all of which face significant funding challenges. To mitigate these challenges, the New Zealand Government launched a National Procurement Service under the umbrella of healthAlliance (hA) to aggregate the purchasing of the DHBs across common categories to drive cost reductions. This paper examines the challenges faced and lessons learned as hA endeavoured to do so. It focuses on hA's pursuit of reliable baseline data, the importance of stakeholder engagement and the limits placed on aggregation by the need for variability and competitive tension. As hA's experience illustrates, understanding aggregated purchasing in a healthcare context creates the potential to achieve best value while delivering results aligned with customer expectations and clinical needs.