Central Procurement for Common Essentials across Public Hospitals
Ministry of HealthSpeakers
Summary
This question concerns Ms Sun Xueling’s inquiry into whether central procurement for common essentials and medical documentation software could lower hospital setup and operating costs. Minister Gan Kim Yong responded that the Group Procurement Office already procures 90% of standard drugs and 60% of non-standard drugs, alongside surgical supplies and contract services. He noted that these services extend to community hospitals and nursing homes, while the Integrated Health Information Systems centrally manages IT purchases and consolidates data centres. These centralized efforts achieve economies of scale and volume discounts, resulting in improved efficiencies and cost savings across the public healthcare system. Minister Gan Kim Yong stated that the Ministry will continue utilizing bulk purchasing to reduce expenses and pass those savings on to patients.
Transcript
34 Ms Sun Xueling asked the Minister for Health (a) whether a study has been done to analyse the benefits of central procurement for common essentials across public hospitals, including software for medical documentation; and (b) whether central procurement can be done selectively to lower the cost of setting up and operating hospitals.
Mr Gan Kim Yong: There are benefits and cost savings from the economies of scale achieved through central procurement of common essentials across public healthcare institutions. Since 2001, the public healthcare clusters have been supported by a centralised Group Procurement Office (GPO). Today, GPO procures about 90% of standard drugs and 60% of non-standard drugs across our public healthcare clusters. It also covers certain common items, such as surgical supplies and contract services. More recently, GPO procurement services have been extended to community hospitals and nursing homes.
On information technology (IT) procurement, the Integrated Health Information Systems (IHiS) has centrally coordinated IT system purchases to allow public healthcare institutions to benefit from volume discounts. It has also consolidated the data centres of individual institutions for better efficiencies. These have brought about cost savings for our public healthcare system.
We will continue to look for ways to bring about greater efficiencies and cost reductions in the healthcare system through bulk purchase and central procurement, and to pass on the savings to our patients.