September 2022 edition 

The HealthShare NSW procurement team used a value based healthcare approach in to develop the new statewide orthopaedic hips and knees contract. The team engaged with clinicians, service managers, and suppliers to ensure that NSW Health has the best value products and services that can support the best outcomes and experience for our patients. 


The HealthShare NSW procurement team used a value based healthcare approach to develop the new statewide orthopaedic hips and knees contract, which came into effect on 1 March 2022.  
The previous contract coming to an end created an opportunity to pilot an alternative approach. HealthShare NSW sought to embed value into the contract, with a focus on improving outcomes that matter to patients, experiences of receiving care and providing care, and the efficiency and effectiveness of care.  
A key difference in the approach was the consideration of value beyond the individual products and prices and extending this to the impacts they have on patients, staff, and the service as a whole. This maximised the ability for procurement to support accelerating innovation and patient care through incentivising patient outcomes.  

Clinical engagement  

Through the contracting process HealthShare enhanced existing engagement with key clinical leads and service managers across NSW to ensure the Tender, evaluation and contract negotiations aligned with the outcomes that matter to patients. 

"The Team wanted to take the opportunity to incorporate more than just your traditional product and price approach in this activity. Engaging clinicians, the Surgical Services Taskforce, and the Commissioning for Better Value program gave us a local and system wide view of current challenges. We then provided the opportunity for suppliers to include value add solutions to these challenges into their offers. Based on the LHD interest in these offers so far, we will use this as a model for future activities."
- HealthShare NSW 

Clinical Advisory Group 

The Surgical Services Taskforce used insights from the Hip Fracture Leading Better Value Care initiative to highlight the current challenges around unwarranted clinical variation in hip and knee replacement surgery. For example, they found the number of prosthesis suppliers used within a hospital was uncapped, with some services using up to eight different suppliers within one facility, each with their own associated consumables and processes. 

"Reducing the sheer number of items we have in stock has improved our theatre preparation and turnover time. There’s less packaging, less waste and less storage space needed.’

‘The clinical outcomes for patients are very clear, we have fewer prostheses to choose from however they are high-quality devices, and their long-term performance is monitored"

- Surgical Taskforce     

Value add opportunities 

Some of the opportunities this approach provided to increase value for patients and the system included: 
  • Supporting the work of the Surgical Services Taskforce by reducing variation of suppliers within hospitals. HealthShare negotiated a best price offer to encourage hospitals to take up the option to select two suppliers from the statewide list. This created a balance between surgeon preference, clinical need, and system efficiency. 
  • Enhancing the role of clinician preference to guide the technical and clinical support inclusions for each site. This replaced the one size fits all approach with a flexible service support model which supported the clinician experience.  
  • Robotic assisted surgery has previously had a limited uptake in public hospitals due to high upfront costs. Although not previously included in this contract, this approach provided the flexibility for suppliers to include a value-add of robotics equipment at no additional cost through a local agreement on product volume. Robotics equipment has the potential to enhance patient outcomes and improve service efficiency by improving spatial accuracy and revision rates for certain Hip and Knee procedures.  
  • To reduce Length of Stay (LOS), increase patient education/ outcomes and improve patient and staff experience, the Patient Pathway Programs were offered by suppliers to support a move towards value based healthcare. The programs will be offered to health services as an opt-in program. The program reviews the whole patient journey to identify opportunities improve outcomes and efficiency.   

Value based procurement  

The Orthopaedic Hips and Knees contract is one example of how a value based healthcare approach can be embedded into procurement to create sustainable improvements within the system. 
  • Using this approach increased the scope of the procurement process. It also gave suppliers an option to provide valueadd opportunities that would not otherwise be included. 
  • Ensuring patients receive the best clinical outcomes through embedding evaluation on products against the Australian Orthopaedic Association National Joint Registry (AOANJR). 
  • Clinicians felt engaged in the process as their experience and expertise was valued and directly enhanced the procurement process and outcomes. 

More information 

Current as at: Friday 16 September 2022
Contact page owner: Strategic Reform and Planning