Procurement in public & private hospitals in Australia and Costa Rica – a comparative case study

This article summarizes exploratory research conducted on supply chain management practices in public hospital systems in the Australian State of Victoria and in Costa Rica. Victoria is the site of a clearly articulated (centralized) supply chain strategy as opposed to Costa Rica, where there is a strong presence of government procurement rules but no such articulated strategy. Importantly, both systems have mixed governance structures (public vs private) and had a willingness to share information pertaining to their purchasing practices. Relatively open-ended interviews, analyzed utilizing MAXQDA 11, allowed us to scrutinize the influence of public policy, supply chain integration, supply chain/clinician collaboration, value analysis teams and group purchasing. We found that centralization of procurement was prevalent in public hospitals in both countries, with more regional centralization in Victoria, Australia due to its size. Also, Private hospital systems are encouraged to take advantage of the centralized procurement policy of the government in both the countries. While standardization was achieved in both countries by better integrating procurement and information technology functions, collaboration between clinicians led to more standardization.