Wound care decision points to future direction of devices work
PHARMAC is entering a new phase of its national hospital medical device contracting, as it implements the first market share contracts for a set of wound care products.
PHARMAC has approved contracts for 73 wound care product lines used in DHB hospitals, products like post-surgery dressings and foam dressings for chronic wounds.
Chief executive Steffan Crausaz says this is an important milestone, the first time PHARMAC has approved contracts that guarantee market share to a supplier, enabling more competitive prices to be negotiated.
“In this phase we will be carefully assessing how many different devices are needed in a specific area. By selecting a more refined range, based on clinical advice and feedback from DHBs, we can reduce DHB expenditure to free up funding which can be used to achieve other health benefits,” he says.
“This approach builds on our established record in negotiating nationally and choosing which products to fund; we think similar benefits can be obtained through an approach like this with medical devices.”
“For this reason we have put an enormous amount of effort into engaging with DHB staff and incorporating their feedback into our decision.”
The wound care decision has several benefits for DHBs, who will pay less for the same quality products, with average savings of 22%.
“This is an important decision for us, laying the foundation for other, similar types of agreements.”
“We will be supporting DHB staff as they transition to these contracts, with a detailed implementation plan for each DHB. We will be monitoring implementation of the contracts and learning from them as we look to expand our work in future.”
Julie Betts, a Wound Care Nurse Practitioner at Waikato DHB and chair of the Wound Care Advisory Group, says DHB staff can have confidence in the quality of the products included in the market share agreements.
“We’re pleased to have had the opportunity to evaluate the products included in these agreements,” says Ms Betts. “Our group is confident that the products in these agreements are clinically suitable for use in DHB hospitals and the community, and will be acceptable to our colleagues in DHBs.”
Savings across DHBs are about $3 million over five years, adding to the $25 million PHARMAC has freed up for DHBs through national procurement of hospital medical devices.
The market share contracts take effect from 1 November 2016, and DHBs have eight months to transition to the contracted products.
Market share procurement for hospital medical devices [link no longer available].
Background information
PHARMAC negotiated its first national contracts for hospital medical devices in 2014. There are now more than 20,000 hospital medical devices listed on the Pharmaceutical Schedule. This is about five times more than the number of medicines listed on the Schedule.
National contracts can free up DHB spending, by reducing the cost of products already in use. To date, PHARMAC’s contracts provide the potential for DHBs to save $25 million over five years on these medical devices, savings that can then be redirected to spend on other health services.
To date PHARMAC has negotiated contracts in six categories:
- Disposable laparoscopic trocars
- Interventional cardiology
- Orthopaedic trauma, spine and CMF implants
- Sterilisation products and consumables
- Sutures
- Wound care
PHARMAC has also begun commercial activity in
- medical thermometer products
- single use instruments
- surgical gloves
- hand hygiene
- venous thromboembolism prevention devices.
PHARMAC’s role now includes managing:
- Spending on medicines used in the community
- Spending on cancer medicines used in DHB hospitals
- Spending on vaccines
- Access to medicines used in DHB hospitals
- National contracts for some categories of medical devices