E-health: paying its way

20 December 2005

Decision will lead to $millions saved… with increased safety in health care
An estimated $200 million  in savings are expected to start flowing from a decision by Australia’s Federal, State and Territory health department chiefs to create a National Product Catalogue (NPC) for health products in the public health system.

“The NPC will allow hospitals and other public health institutions to obtain essential information from one electronic source about the drugs, medical devices and healthcare products they purchase, heralding the long-overdue introduction of 21st century e-procurement processes to the public health system,” says Dr Ian Reinecke, Chief Executive of the National E-Health Transition Authority Limited (NEHTA). “This is now standard practice in industry but has been delayed in health because of its complexity.”

The National E-Health Transition Authority Limited is a not-for-profit company established by the Australian Commonwealth, State and Territory governments in July. It aims to develop better ways of electronically collecting and securely exchanging health information.

“Part of the $200 million savings will be made from the one product, one code concept,” explains Dr Reinecke. “Each product in the NPC will be assigned a unique identification code . With this in place, the number of products incorrectly ordered because of identification errors will reduce significantly – potentially delaying the treatment of patients, who need the right product at the right time in the right place.

“Substantial savings will also arise from the NPC removing the need for each of the literally hundreds  of public health purchasing offices across Australia to maintain their own catalogue of product details. This duplication currently generates significant unnecessary overheads.

“In terms of safety and quality in health care, other advantages of the NPC is that it lays the foundations for swift product recalls and precise product tracking so that flawed, out-of-date or missing stock can be discovered and replaced before it’s desperately needed for use,” explains Dr Reinecke.

The NPC will be available for use from March 2006, with supplier take-up completed over 12-18 months.

The NPC will be built by NEHTA from the existing Australian Catalogue of Medicines (ACOM), which was funded by the Australian Government Department of Health and Ageing.

The NPC will be hosted on the EANnet platform – a well established, industry recognised platform run by GS1 Australia, a non-profit organisation that locally administers a global multi-industry system of product identification and communication. More than 600 retail companies already host their product data on EANnet.

The need to move towards a single product repository has long been recognised by industry associations such as Medicines Australia (representing research based pharmaceutical companies), the Generics Medicines Industry Association and the Australian Self Medication Industry (representing the Australian consumer healthcare products industry, including over-the-counter and complementary medicine products).