DHB Procurement

In 2015, our DHB shareholders identified a clear need for a nationally-agreed strategy for health sector procurement to ensure the best value for money.

After much consultation, the DHB Procurement Strategy was endorsed by all DHB chief executives in April 2016 and published the following month. The Strategy focuses on reducing complexity, through consolidation and standardisation, and leveraging the capability of DHBs, PHARMAC and the Ministry of Business Innovation and Employment (MBIE), to increase real return on DHB investment in procurement.

The Strategy is being implemented through aligned annual planning and the implementation of the Procurement Operating Model, under the guidance of the sector’s first ever collective governance model, led by the Joint Procurement Authority.

To read or download a copy of the DHB Procurement Strategy, please click here.

Operating Model

In March 2017, DHB chief executives approved the Procurement Operating Model which made NZ Health Partnerships responsible for the DHB National Procurement Service.

The Operating Model covers approach, functions and roles, and guides how the Procurement Strategy will be operationalised.

Procurement accountabilities and activity within the Operating Model are split into the following broad classifications:

MBIE – syndicated sourcing, rules of sourcing and government direction provided by MBIE.

PHARMAC – pharmaceutical and medical device procurement managed by PHARMAC on behalf of the sector (increasing over time).

National –   national procurement services which includes strategic category management, and strategic relationships for activities identified by the Joint Procurement Authority which will inform the Aligned Annual Procurement Plan.

Collaborative – procurement categories / opportunities that include several DHBs. Collaborative procurement is governed by the Joint Procurement Authority and analysis is coordinated nationally by NZ Health Partnerships.

Local – procurement categories/opportunities and activities conducted at a local level by an individual DHBs for its individual use.

National Procurement Service

The National Procurement Service became operational at NZ Health Partnerships on 1 May 2017. This is one step in the implementation of the procurement operating model and heralds a new era of collective DHB Procurement.

Other initiatives to be implemented include:

  • Strategic category management which will see a systematic approach applied to each category type in order to identify savings potential and value generation above and beyond a regular sourcing approach
  • National catalogue of goods and services will be built progressively as DHBs migrate onto the National Oracle Service
  • Supplier Relationship Management framework delivery and implementation
  • Working collaboratively to transition medical device management to PHARMAC
  • Enhancing procurement  capability by delivering national consistency in processes, contracts and  expectations
  • Providing a national information service that informs strategy, procurement activities and provides data to support decision making,