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Public hospitals spent more than $1.6 billion on goods and
services in the last financial year. This procurement activity
should demonstrate integrity, transparency and value-for-money.
Health Purchasing Victoria (HPV) performs central procurement for
the sector well, has expanded the range of products centrally
procured and is making significant savings. However, 10 years after
its establishment, HPV is yet to implement all its functions under
the Health Services Act 1988 or exploit its full
potential. By not undertaking its probity assurance function, and
having only limited involvement in procuring medical equipment, HPV
has missed opportunities for greater savings and better procurement
practice. As system manager, the Department of Health should have
done more to address these issues. There is also room for
improvement in hospital procurement practices, with almost one in
five of the hospital procurement processes reviewed in the audit
having weaknesses in the transparency and appropriateness of
decision-making.
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