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The Challenges Facing Procurement In The Aged Care Sector

Major changes in aged care protocols are on the horizon.  Both the final report of the Royal Commission into Aged Care and the lasting impact of the COVID-19 pandemic have shone a light on the need for a higher standard of care for older Australians. But what challenges do procurement professionals in the aged care sector face?

Released in March 2021, the Royal Commission includes 148 recommendations for the government to consider and emphasises that standards of aged care across the sector must rise. Inevitably, better care will drive higher costs, and the vast majority of aged care operators are ill-equipped to accommodate this – not least because many of Australia’s care homes are small for-profit businesses with no real scope for leveraging economies of scale. In addition, increases in government funding for aged care over the short and medium term will likely not be enough to cater to Australia’s aging population. Post-COVID-19, extra precautions must also be taken to protect people from future pandemics and other more simple viruses, which will further driving up costs in the sector.

To ensure that procurement professionals can continue to provide a high standard of aged care for the foreseeable future, teams will need to implement new technologies, such as Procure 2 Pay systems, to establish efficient and robust processes.

Last month, for example, Wholesale trading platform TradeSquare announced a partnership with consulting firm Banksia Consulting Group to create a pilot program with aged care providers designed to improve their procurement outcomes.

The program will see the development of a commercial platform that enables aged care providers to purchase products and services at a good and fair price. Smaller aged care providers are being targeted for the pilot program in order for TradeSquare and the Banksia Consulting Group to better understand their needs. Subsequently, TradeSquare will procure the products and services they require, prioritising Australian products, for the best market price.

“We’re trying to provide a consolidated pocket where providers can just go to one platform. But we’ve come from a learned experience where we’re learning through the pilot as to what they need, how they need it and how often they need it,” Sean Matthews, managing director of Banksia Consulting Group told Australian Ageing Agenda.

The supply chain disruption caused by COVID-19 has also made it more difficult for aged care providers to quickly source the products and services they need.  At the height of the pandemic, for example, procurement professionals across multiple sectors struggled to obtain masks, hand sanitisers, gowns, ventilator components, and various other personal protective equipment (PPE). To mitigate against future disruptions, procurement professionals must reevaluate their existing vendor network and supply chain strategy.

PASA Aged Care Procurement

The 7th annual Aged Care Procurement conference brings together the largest gathering in the country of Aged Care Procurement Leaders and their teams. Over 200 attendees are expected to attend this 7th annual PASA Aged Care Procurement Conference at Royal Randwick Racecourse on 30th November & 1st December 2021 – live and in person!

Find out more information and register for the event here.

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