Central Procurement for Common Essentials across Public Hospitals

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, the 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 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.