The first implementation of a national finance application for district health boards (DHBs) is being rolled out at the Hutt District Health Board.
Housed by the Health Alliance in Auckland and running on an Oracle Exadata machine – most of the DHBs run Oracle - “finance” is standardisation of a national set of accounts. It’s the first of several transformational projects under the auspices of Health Benefits Ltd (HBL).
The Health Alliance is a partnership involving Health Benefits and four northern DHBs: Northland, Waitemata, Auckland, Counties Manukau.
HBL was established by the government in 2010 to work together with the health sector to deliver sustainable support for New Zealand health services. It identifies opportunities which individual or small groups of DHBs would find difficult to achieve alone. Its target is to make savings of $700 million in its first five years of operation.
“So far we’ve made savings of $214 million,” says communications and benefits manager Mark Reynolds. “These go straight to the DHBs.”
HBL has 20 staff and an operational budget of around $6 million annually.
“All the DHBs signed off on a national case around 18 months ago,” Reynold says.
Modules will be progressively added to the national shared service for finance as it is rolled out to other DHBs. “We expect to save $500 million over 10 years,” Reynolds says.
Earlier, a national banking contract was signed with Westpac for all the DHBs.
Reynolds says Health Benefits plans to establish a national shared service for procurement in July. It will be based on the broader all-of-government contract model. The DHBs will be able to purchase products off one platform.
“There are some regional differences with the DHBs,” he says. “For example, some of them have good contracts already. But they’ve all agreed to look at things in the national interest.
Reynolds says Christchurch-based EBOS has been named as preferred supplier for warehousing. “At the moment, there are around 40 warehouses. We’re looking at a regional model.”
A national infrastructure service, including data centres, will follow. “We’re finalising a business case to provide infrastructure as a service.”
In establishing that case, Health Benefits is talking to commercial providers such as Datacom.
Other procurement contracts include food services, and linen and laundry services. Compass is the preferred vendor for food services, and Spotless for linen and laundry.
“These all have to be staged implementations,” Reynolds says. “They have to take into account local delivery and existing contracts.”
Contracts for things such as food, and linen and laundry, are likely to run for as long as 15 years. Reynolds says it will take two years to get all of the DHBs on the financial service.
Key to procurement is the development of a common national catalogue. “This will give transparency. It’s something the health sector hasn’t had before.”
Though Health Benefits is not a direct employer, other than its 20 staff, the majority of whom are involved in programme management, it has kept all the national health sector unions in the loop. “They’ve agreed to the changes.”
Health Benefits is a Crown company under the Finance Act. Its shareholders are the Ministers of Health and Finance.