An Approach to  Active Procurement  Malcolm Pollock  Jim Warren  Yulong Gu                    The National InstituteInform...
Outline          • History           The NHITB and the Cluster          • Motivation           The innovation conundrum   ...
History• Partnership summit• Improving procurement high on  Cluster wish list• Active procurement idea tabled• Targeted at...
Motivation• Current approach  – assumes buyer fully understands    solution (when normally they don’t!)  – creates adversa...
Active Procurement Team• Partnership between purchaser and facilitator  (NIHI in most cases to date)• Purchaser ‘owns’ the...
6-phase Process                          1. Purchaser & facilitator develop the                 Governance structure      ...
1. Preparing the ground• Developing the governance model  – Roles and responsibilities of the parties• Appointing the eval...
2. EoI Preparation• High level description of  –   desired outcomes  –   Relevant supporting docs  –   context for the ini...
3. Short Listing• Technical group  reviews  – Architecture  – Underlying technology  – Integration• Functional panel  – st...
Example of the Traffic Light Approach       EOI Response Assessment       1. The respondent has software to demonstrate.  ...
4. Vendor Selection• Functional Panel reviews totality of  the solution  – functionality, fitness for    purpose, and usab...
4. Vendor Selection• Technical Panel reviews suitability of  solution  – standards, architectural    compliance with natio...
4. Vendor SelectionManaged decision by Evaluation  Panel:• Identify differences in panel  members’ evaluations• Focus on t...
5. Implementation Planning Study• Define trial deliverables through the collective  wisdom and experience of vendor, purch...
6. Contracting                 • The process will engender                   – a culture that is non-adversarial          ...
Trials of Active Procurement• Shared Care Planning  National Shared Care Plan Programme and healthAlliance• Broking servic...
Lessons So Far                 • Fast, fair & low cost                 • Strong positive feedback from                   p...
Where to from here?
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An Approach to Active Procurement

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Malcolm Pollock
National Institute for Health Innovation, University of Auckland
(Friday, 3.00, General 3)

The National Health Information Technology Board developed the concept of Active Procurement as a result of approaches made by the Health Information Technology Cluster and others, suggesting that the current modes of procurement in the health sector were impeding progress and innovation. The National Institute for Health Innovation (NIHI) proposed an approach to implementing the principles of Active Procurement consisting of six phases: 1) developing a high level description of the desired outcomes, 2) using this to develop an Expression of Interest, 3) developing a short-list of qualified vendors, 4) selecting a vendor, 5) carrying out an Implementation Planning Study, and 6) Contracting with the selected vendor(s) to deliver the pilot. Active Procurement has now been trialled with facilitation from NIHI for three innovation projects with positive outcomes such as appropriate vendor selection decisions that were made quickly and at relatively low cost. The approach has demonstrated clear benefits for initiatives that require innovation, pilots and/or the need for ongoing collaborative relationships with the vendor. This paper outlines the findings from these initial Active Procurement exercises and sets out a template for the utilisation of the concepts and processes that support Active Procurement.

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An Approach to Active Procurement

  1. 1. An Approach to Active Procurement Malcolm Pollock Jim Warren Yulong Gu The National InstituteInformatics for Health Innovation
  2. 2. Outline • History The NHITB and the Cluster • Motivation The innovation conundrum • Approach 6 phases • Lessons learned
  3. 3. History• Partnership summit• Improving procurement high on Cluster wish list• Active procurement idea tabled• Targeted at innovation projects but wider application appropriate in some cases• NIHI picks it up
  4. 4. Motivation• Current approach – assumes buyer fully understands solution (when normally they don’t!) – creates adversarial relationships – costly, lengthy, ineffective – impedes innovation• Active Procurement – Fast about 12 weeks – fair, auditable process – enables partnership culture – encourages innovation
  5. 5. Active Procurement Team• Partnership between purchaser and facilitator (NIHI in most cases to date)• Purchaser ‘owns’ the decision and the contracting process• Purchaser specifies high level requirements for EoI and appoints decision panel• Facilitator provides and manages the process of vendor selection – Provides decision process and framework – Finalises and issues EoI – Carries out technical evaluation – Chairs decision processes as non-voting member
  6. 6. 6-phase Process 1. Purchaser & facilitator develop the Governance structure governance model, appoint evaluation panels & define high-The facilitator assists Funding model level requirements.in phase 1, managesphases 2, 3 & 4, mayor may not beinvolved in phase 5, 2. Purchaser & facilitator draft EoI. EoI Vendors develop responses to EoI.and will not beinvolved in phase 6. 3. Evaluation panels select a short EoI responses list from vendor responses to EoI. Short list 4. Evaluation panels select preferred Shortlisted vendors present to vendor. evaluation panels. 5. Vendor, with purchaser, conducts Implementation planning study the Implementation Planning contract with vendor Study. 6. Commercial contracting between Full commercial contract purchaser and vendor
  7. 7. 1. Preparing the ground• Developing the governance model – Roles and responsibilities of the parties• Appointing the evaluation & technical panels• Defining the high level requirements – Purpose – Strategic implications – Constraints – Key functions – Desired outcomes
  8. 8. 2. EoI Preparation• High level description of – desired outcomes – Relevant supporting docs – context for the initiative – selection criteria – a description of the process – basic terms and conditions• Facilitator may contribute knowledge and research
  9. 9. 3. Short Listing• Technical group reviews – Architecture – Underlying technology – Integration• Functional panel – strong clinical/user bias• Traffic light approach
  10. 10. Example of the Traffic Light Approach EOI Response Assessment 1. The respondent has software to demonstrate. 2. The respondent demonstrates an understanding of shared care plans. 3. The respondent recognises the need to work in partnership with clinical teams. 4. The respondent has the willingness and ability to collaborate and integrate with other suppliers Assessor 1 Criteria Vendor 1 Vendor 2 Vendor 3 Vendor 4 Vendor 5 Vendor 1 g g g g a a 2 a a g g g a 3 g g g g g g 4 r g g g r g Assessor 2 Criteria Vendor 1 Vendor 2 Vendor 3 Vendor 4 Vendor 5 Vendor 1 a a g g g g 2 a r g g g g 3 g a a a g a 4 g g g g a g Assessor 3 Criteria Vendor 1 Vendor 2 Vendor 3 Vendor 4 Vendor 5 Vendor 1 g g g g g a 2 a a a g a a 3 a g g g g g 4 r a g g r a
  11. 11. 4. Vendor Selection• Functional Panel reviews totality of the solution – functionality, fitness for purpose, and usability – its suitability to work within the envisaged clinical context – vendor culture and commitment
  12. 12. 4. Vendor Selection• Technical Panel reviews suitability of solution – standards, architectural compliance with national strategy – approaches to inter- operability, security and privacy – technical competence and responsiveness of vendor team
  13. 13. 4. Vendor SelectionManaged decision by Evaluation Panel:• Identify differences in panel members’ evaluations• Focus on the ‘red lights’• Chair drives process but does not influence selection• Opportunity exists for circuit breakers e.g. references, follow up questions• Consensus sought – voting as last resort
  14. 14. 5. Implementation Planning Study• Define trial deliverables through the collective wisdom and experience of vendor, purchaser and other stakeholders• Evaluation organisation should participate at this stage• The vendor is paid for their work during this period – probably on an approximate cost recovery basis
  15. 15. 6. Contracting • The process will engender – a culture that is non-adversarial – good human relationship dynamics – a trial scope that everyone understands and buys into • Commercial and contractual negotiations – vendor advantage: investment that has been made in them and their solution by the purchaser – purchaser strength: their option to go back to market – both sides: sense of common purpose & understanding
  16. 16. Trials of Active Procurement• Shared Care Planning National Shared Care Plan Programme and healthAlliance• Broking services for community e-prescribing Safe Medications Management Programme• Shared Maternity Record of Care Maternity Shared Record of Care Programme• Maternity Clinical Information System Maternity Clinical Information System Programme
  17. 17. Lessons So Far • Fast, fair & low cost • Strong positive feedback from participants • Development and implementation of a collaborative culture • Balances the dynamics of innovation and commercial rigour • Wider applicability where the solution is not commoditised
  18. 18. Where to from here?

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