‘PURCHASING’ A MORE AFFORDABLE HEALTHCARE SYSTEM
Professionalisation of the purchasing function is essential for a more efficient organisation of hospitals, specialist centres and elderly homes, writes DR MARCO TIEMAN
THE government has been urged to regulate the cost of private healthcare as part of efforts to lessen the cost of living in Malaysia. The authorities will target healthcare spending of 6.0 per cent to 7.0 per cent of the gross domestic product (GDP), an increase from the current 4.4 per cent.
Recently it was reported that medical supplies in Malaysia is a multi-billion ringgit busines. What needs to be done to create a more affordable healthcare system in Malaysia? Professionalisation of the purchasing function of healthcare organisations is a good starting point.
Managing a world-class healthcare organisation does not only require medical but also business expertise. Within the healthcare organisation the purchasing function is increasingly important. In fact, a significant part of healthcare costs can be directly linked to the effectiveness of the purchasing function.
There is a difference between buying and purchasing. Purchasing is the professional buying by an organisation. Purchasing is structured, based on facts, and shaped by corporate or public policy. Buying in the private domain has space for irrational considerations, whereas in the corporate or public domain this space is not present.
I have learnt that purchasing involves everything you receive an external invoice for. Therefore, the finance department is the starting point in the optimisation of purchasing. Modern purchasing is data oriented, involved in obtaining intelligence on the purchasing market as well as recurring analysis of own spending. Purchasing is hereby more a science than an art.
Professionalisation of the purchasing function is essential for a more efficient organisation of hospitals, specialist centres, elderly homes, disability care, general practitioners, dentists, etc. However, what I often discover with healthcare organisation in Malaysia is that there is a lot of untapped potential in saving purchasing costs and improving the purchasing organisation.
Purchasing in healthcare organisation are generally not well structured, category management and inventory management practices are not effective enough, synergy advantages not
Managing a world-class healthcare organisation does not only require medical expertise but also business expertise.