Better health outcomes through better procurement

A more mature approach to procurement is needed to improve health outcomes, argues Thinc’s Roger Carthey.

Australia is in many respects still a young and pioneering country. It’s in our blood to adopt a ‘can do’ attitude to delivering major infrastructure projects, including healthcare assets, and our approach to procurement in many ways reflects this. It has served us well to date, but is it right for the growing, maturing nation we are fast becoming and does it deliver the best possible health outcomes?

In mid 2012, two Thinc Directors participated in a European study trip organised by the Australian Health Design Council and the Australasian College of Health Service Managers to seek out procurement best practice and benchmark the Australian healthcare system against some of the most respected systems in the world. We visited healthcare facilities in the United Kingdom, Holland and Norway and the results were interesting.

What we found, was that both healthcare design and procurement are significantly affected by cultural and historical factors. Procurement models and designs varied significantly across the three countries visited and we could see a clear relationship to cultural priorities and imperatives.

United Kingdom

Over the last decade or more the UK has delivered a significant number of new health facilities through the PPP/PFI models and to a lesser extent through the LIFT partnership model.

Although potentially expensive over the long term, the partnership models have helped to deliver a major program of work with limited upfront capital and in response to serious under investment in healthcare infrastructure over many years.

The results are satisfactory, but not inspirational, and the British Government has clearly opted for quantity over quality – reflecting the socialist core principles of the NHS that ‘it meet the needs of everyone and that it be free at the point of delivery.’

The Netherlands

The Dutch healthcare system is complicated but is best described as ‘competitive altruism’. Health insurance is compulsory for all primary and curative care but long term care for the elderly and the dying is funded through social insurance taxation.

The vast majority of health services are provided by not-for-profit NGOs in a competitive environment. Providers bid to provide health services to communities and take on commercial risk to do so. The built assets they need to deliver the services are left up to the providers to decide – there is therefore a clear link between facilities and service models.

When seeking to build new facilities or renovate existing assets, we found that providers used a variety of contract forms but with a focus on the quality and appropriateness of the end result, rather than a simple focus on lowest cost. This is also reflective of the diversity of healthcare providers, each of which is free to choose the procurement method that best satisfies their needs.

Holland is densely populated and has a relatively homogenous population with broadly consistent demands on the health system. It is therefore easy for individuals to switch between healthcare providers and competition is high. This situation generally leads to highly efficient health services delivered from state-of-the art built assets. It is a sophisticated model that falls out of a mature economic and cultural environment…