Health Services (Health Purchasing Victoria) Act 2001 (Vic)

Health Services (Health Purchasing Victoria) Act

2001

Act No. 18/2001

TABLE OF PROVISIONS

Section Page

1.	Purpose	1
2.	Commencement	1
3.	Principal Act	1
4.	Definitions	2
5.	Objectives of Principal Act	3
6.	Directions of Secretary	3
7.	Powers of Minister	3
8.	New Part 6 inserted	4
PART 6—HEALTH PURCHASING VICTORIA	4
Division 1—Establishment	4

129.	Establishment of Health Purchasing Victoria	4
130.	HPV represents the Crown	4

Division 2—General functions and powers 5

131.	Functions of HPV	5
132.	Powers of HPV	6
133.	Factors to which HPV must have regard in performing
functions and exercising powers	7

Division 3—Purchasing Policies 8

134.	Purchasing policies	8
134A.	HPV may exempt public hospitals from policies	9
134B.	Procedure for making and notification of purchasing
policies	10
134C.	Disallowance of purchasing policies	11

Division 4—Membership and procedure 12

134D.	Membership of HPV and terms of office	12
134E.	Terms and conditions	13
134F.	Removal and resignation	13

134G. Procedure of HPV 14

134H.	Validity of HPV decisions	15
134I.	Members' pecuniary interests	15

i

Section Page

134J. Improper use of information 16

134K. Delegation	16
Division 5—General	16

134L. Directions of the Minister or Secretary 16

134M. Strategic plans	17
134N. Existing supply contracts	17

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ENDNOTES 19

ii

Victoria

No. 18 of 2001

Health Services (Health Purchasing

Victoria) Act 2001†

[Assented to 29 May 2001]

The Parliament of Victoria enacts as follows:

1. Purpose

The purpose of this Act is to amend the Health goods and services to health or related services, including public hospitals, and to establish Health Purchasing Victoria.

2. Commencement

This Act comes into operation on 1 July 2001.

3. Principal Act

Health Services (Health Purchasing Victoria) Act 2001

Act No. 18/2001

In this Act, the Health Services Act 1988 is	See: Act No.
called the Principal Act.	49/1998 Reprint No. 6
as at 1 July 2000
and amending
Act Nos 73/2000 and
1/2001. LawToday:
dpc.vic.
gov.au

4. Definitions

In section 3(1) of the Principal Act, insert the
following definitions—

' "goods and services" includes facilities,

equipment and supplies;

"health or related service", in Part 6, means—

(a)	a registered funded agency, multi purpose service or health service establishment; or
(b)	that provides funds, facilitates access or provides insurance in relation to health

any other person, body or organisation but are not limited to—

(i) aged care services; or
(ii) palliative care services; or
(iii) disability services; or
(iv) pharmaceutical services; or
(v) ambulance services;

"HPV" means Health Purchasing Victoria

established by section 129;
Health Services (Health Purchasing Victoria) Act 2001

s. 5 Act No. 18/2001

"HPV direction" means a direction given by

HPV under section 132(2)(c);

"purchasing policy" means a purchasing policy made by HPV under section 134;'.

5. Objectives of Principal Act

In section 9 of the Principal Act, after
paragraph (c) insert—
"(ca) purchasing arrangements for public hospitals

and supply chain management by public hospitals provide value for money; and".

6. Directions of Secretary

(1) In section 42(1) of the Principal Act, after

paragraph (fa) insert—
"(fb) a requirement that a public hospital appoint

HPV as its agent for the purposes of obtaining or purchasing goods and services and the conditions on which the appointment is to be made;".

(2) After section 42(2) of the Principal Act insert—
"(2A) The Secretary must ensure that a direction

under sub-section (1)(fa) to a public hospital is not inconsistent with an HPV direction or a purchasing policy that applies to the public hospital.".

7. Powers of Minister

In section 58(1) of the Principal Act, after
paragraph (c) insert—

"(ca) in the case of a public hospital, has failed to

comply with an HPV direction or a
purchasing policy that applies to the
hospital; or".

Health Services (Health Purchasing Victoria) Act 2001

Act No. 18/2001 s. 8

8. New Part 6 inserted

After Part 5 of the Principal Act insert—

'PART 6—HEALTH PURCHASING VICTORIA

Division 1—Establishment

129. Establishment of Health Purchasing
Victoria

(1) Health Purchasing Victoria is established.

(2) HPV—

(a) is a body corporate with perpetual succession;

(b) has a common seal;

(c)	may sue and be sued in its corporate name;
(d)	may acquire, hold and dispose of real and personal property;
(e)	may do and suffer all things that a body corporate may, by law, do and suffer.

(3) The common seal must be kept as directed

by HPV and must not be used except as
authorised by HPV.

(4) All courts must take judicial notice of the common seal on a document and, until the contrary is proved, must presume that the seal was properly affixed.

130.

HPV represents the Crown Crown and holds its property on behalf of the Crown.

Health Services (Health Purchasing Victoria) Act 2001

s. 8 Act No. 18/2001

Division 2—General functions and powers

131. Functions of HPV
HPV has the following functions—

(a)	to supply or facilitate access to the supply of goods and services to public hospitals and other health or related services on best value terms;
(b)	in relation to the supply of goods and services to public hospitals and the management and disposal of goods by public hospitals—

(i)  to develop, implement and review policies and practices to promote best value and probity; and

(ii)  to provide advice, staff training and consultancy services;

(c)	to provide advice, staff training and consultancy services in relation to the supply of goods and services to, and the management and disposal of goods by, health or related services other than public hospitals;
(d)	hospitals with purchasing policies and

to monitor compliance by public irregularities to the Minister;

(e) to foster improvements in the use and application of purchasing systems and trading by electronic transactions by

health or related services;

Health Services (Health Purchasing Victoria) Act 2001

Act No. 18/2001 s. 8

(f) to establish and maintain a database of purchasing data of public hospitals and supply markets for access by public

hospitals;

(g)	to ensure that probity is maintained in purchasing, tendering and contracting activities in public hospitals;
(h)	any other functions conferred on HPV by this or any other Act.

132. Powers of HPV

(1) HPV has all the powers necessary to perform its functions.

(2) Without limiting sub-section (1), HPV

may—

(a) enter into contracts or arrangements, including joint ventures, on its own behalf or on behalf of one or more health or related services;

(b) call and award tenders and advertise;

(c) give written directions to one or more public hospitals—

(i)  relating to the purchase of goods and services by public hospitals and the management and disposal

of goods by public hospitals;

(ii) maintained in purchasing,

to ensure that probity is activities;

(d) public hospital to audit compliance
with purchasing policies and HPV

require the chief executive officer of a HPV;

Health Services (Health Purchasing Victoria) Act 2001

s. 8 Act No. 18/2001

(e)	require the chief executive officer of a public hospital to provide HPV with information and data relating to the supply of goods and services and the management and disposal of goods;
(f)	employ staff, appoint agents and act as agent;
(g)

establish advisory committees to assist functions;

(h) exercise any other powers conferred on HPV by this or any other Act.

(3) A public hospital must comply with an HPV

direction that applies to it, except to the
extent that the direction is inconsistent with
the terms of any contract that was entered
into by the public hospital before the
direction was given to the hospital by HPV.

(4) The chief executive officer of a public

hospital must provide to HPV on request
within 28 days or any longer period specified

in the request—

(a)	audit reports referred to in sub-section (2)(d);
(b)	information and data referred to in sub- section (2)(e).

133.  Factors to which HPV must have regard in performing functions and exercising powers

In performing functions and exercising powers under this Act, HPV must have regard to each of the following matters—

(a) the clinical needs of patients and other users of health or related services;

Health Services (Health Purchasing Victoria) Act 2001

Act No. 18/2001 s. 8

(b)	the ability of suppliers to supply goods and services required by health or related services;
(c)	the price, quality and accessibility of goods and services supplied or proposed to be supplied to health or related services;
(d)	the individual conditions and requirements of health or related services;
(e)	the effect of tendering and contracting processes on the viability of small and medium-sized businesses;

(f) local employment growth or retention.

Division 3—Purchasing Policies

134. Purchasing policies

(1) HPV may prepare, make, amend and revoke

instruments, to be known as "purchasing
policies", with respect to policies and
practices (including probity) relating to the
supply of goods and services to public
hospitals and the management and disposal
of goods by public hospitals.

(2) A purchasing policy—

(a)	may be of general or limited application;
(b)	may differ according to differences in time, place or circumstance;
(c)	may confer a discretionary authority or impose a duty on a specified person or class of persons;

Health Services (Health Purchasing Victoria) Act 2001

s. 8 Act No. 18/2001

(d)	may leave anything to be approved by or to the satisfaction of a specified person or class of persons;
(e)	matter contained in any document, code, standard, rule, specification or

may apply, adopt or incorporate any or published by any person whether—

(i)  wholly or partially or as amended by the policy; or

(ii)  as formulated, issued, prescribed or published at the time the policy is made or at any time before then; or

(iii) as formulated, issued, prescribed
or published from time to time;

(f) may provide in a specified case or class of cases for the exemption of public hospitals or classes of public hospitals from any of the provisions of the policy, whether unconditionally or on specified conditions and either wholly or to such an extent as is specified.

(3) A public hospital must comply with each

purchasing policy to the extent that it applies
to the public hospital.

134A. HPV may exempt public hospitals from

policies

HPV may, by notice published in the Government Gazette, exempt a public hospital or a class of public hospital from

complying with a purchasing policy.

Health Services (Health Purchasing Victoria) Act 2001

Act No. 18/2001 s. 8

134B. Procedure for making and notification of

purchasing policies

(1) HPV must give written notice of its intention

to make, amend or revoke a purchasing
policy to—

(a)	each public hospital that will be affected by the making, amendment or revocation; and
(b)	any other person that HPV considers will be affected by the making, amendment or revocation.

(2) HPV may give the notice referred to in sub-

section (1) by publishing it in a newspaper
generally circulating in Victoria or in any
other manner that HPV considers is likely to
bring the notice to the attention of the
relevant person.

(3) The notice must—

(a)	contain a copy of the proposed policy or amendment (or in the case of a proposed revocation, the policy proposed to be revoked) or specify where a copy can be obtained; and
(b)	invite comments or submissions within the time (being not less than 14 days after the giving or publication of the notice) specified in the notice.

(4) In making, amending or revoking a policy, HPV must take into account any comments or submissions made within the time

specified in the notice.
Health Services (Health Purchasing Victoria) Act 2001

s. 8 Act No. 18/2001

(5) HPV must cause notice of the making,

amendment or revocation of a policy to be forwarded to the Minister and published in the Government Gazette.

(6) HPV must include in its report of operations

for a financial year under Part 7 of the
Financial Management Act 1994—

(a)	details of the making, amendment or revocation of any purchasing policies during the financial year; and
(b)	a list of all purchasing policies in force at any time during the financial year; and
(c)	details of any purchasing policy or part of a purchasing policy disallowed by the Minister during the financial year.

134C. Disallowance of purchasing policies

(1) The Minister may at any time, by notice in writing given to HPV and published in the Government Gazette, disallow a purchasing

policy or part of a purchasing policy.

(2) The disallowance takes effect on the

publication of the notice.

(3) Subject to sub-section (4), if a purchasing

policy or part of a purchasing policy is
disallowed, the disallowance has the same
effect as a revocation of the purchasing
policy or part.

(4) If a purchasing policy or part of a purchasing policy is disallowed—

(a) any purchasing policy or part that had been revoked by the disallowed purchasing policy or part is revived as from the beginning of the day on which

Health Services (Health Purchasing Victoria) Act 2001

Act No. 18/2001	s. 8
the purchasing policy or part was disallowed; and

(b) any purchasing policy or part that had been amended by the disallowed purchasing policy or part takes effect without that amendment as from the beginning of the day on which the purchasing policy or part was disallowed in all respects as if the disallowed purchasing policy or part had not been made.

Division 4—Membership and procedure

134D. Membership of HPV and terms of office

(1) HPV consists of the following members

appointed by the Governor in Council on the

recommendation of the Minister—

(a)	a chairperson who, in the Minister's opinion, has expertise in the health care industry;
(b)	3 people each of whom is employed by a metropolitan health service and one of whom is a chief executive officer of a

metropolitan health service;

(c)	2 people each of whom is employed by a hospital listed in Schedule 1 and one of whom is a chief executive officer of a hospital listed in Schedule 1;
(d)	1 person employed in the Department nominated by the Secretary;
(e)	1 person employed in the Department of Treasury and Finance nominated by the Secretary to that Department;

Health Services (Health Purchasing Victoria) Act 2001

s. 8 Act No. 18/2001

(f) up to 2 people (if any) who, in the Minister's opinion, have expertise relevant to the functions of HPV.

(2) The Public Sector Management and

Employment Act 1998 does not apply to a member in respect of the office of member.

134E. Terms and conditions

(1) A member of HPV holds office for the term,

not exceeding 3 years, specified in the
instrument of appointment and is eligible for
re-appointment.

(2) A member of HPV is entitled to be paid—

(a)	reasonable expenses incurred in holding office as member; and
(b)	such remuneration as is specified in the instrument of appointment.

(3) Sub-section (2)(b) does not apply to a

member who is—

(a)

employed by a metropolitan health Schedule 1; or

(b) an employee in the public service within the meaning of the Public Sector Management and

Employment Act 1998.

134F. Removal and resignation

(1) A member of HPV may resign by writing signed by that person and delivered to the Governor in Council.

(2) If a member referred to in section

134D(1)(b) or (c) ceases to be employed by a
metropolitan health service or a hospital
listed in Schedule 1 (as the case may be) or a

Health Services (Health Purchasing Victoria) Act 2001

Act No. 18/2001 s. 8

member referred to in section 134D(1)(d) or becomes vacant on the day that is 3 months after the day on which the member ceased to be so employed.

(e) ceases to be employed by the relevant

(3) The Governor in Council, on the

recommendation of the Minister, may
remove a member, or all members, from
office.

(4) The Minister must recommend the removal of a member if the Minister is satisfied that the member—

(a)	is physically or mentally unable to fulfil the role of member; or
(b)	an offence, the commission of which, in

has been convicted or found guilty of person unsuitable to be a member; or

(c)	has been absent, without leave of HPV, from all meetings of HPV held during a period of 6 months; or
(d)

is an insolvent under administration Law.

134G. Procedure of HPV

(1) The chairperson of HPV, or in his or her

absence a member elected by the members present, must preside at a meeting of HPV.

(2) A majority of members of HPV for the time being constitutes a quorum of HPV.

(3) The person presiding at a meeting of HPV

has a deliberative vote and, if voting is equal,
a second or casting vote.

Health Services (Health Purchasing Victoria) Act 2001

s. 8 Act No. 18/2001

(4) Except as otherwise provided in this

Division, the procedure of HPV is in the discretion of HPV.

134H. Validity of HPV decisions

An act or decision of HPV is not invalid by reason only of—

(a) a defect or irregularity in or in connection with the appointment of a member of HPV; or

(b) a vacancy in the membership of HPV.

134I. Members' pecuniary interests

(1) A member of HPV who has a direct or

indirect pecuniary interest in a matter being
considered or about to be considered by
HPV must, as soon as practicable after the
relevant facts have come to his or her
knowledge, declare the nature of the interest
at a meeting of HPV.
Penalty: 5 penalty units.

(2) The person presiding at the meeting must cause the declaration to be recorded in the minutes of the meeting.

(3) A member who has a conflict of interest in a

matter—

(a) must not be present during any deliberations on the matter; and

(b) is not entitled to vote on the matter.

(4) If a member votes on a matter in

contravention of sub-section (3)(b), his or
her vote must be disallowed.

Health Services (Health Purchasing Victoria) Act 2001

Act No. 18/2001 s. 8

(5) For the purposes of this section, a member is

not to be regarded as having a pecuniary interest in a contract or arrangement only because that contract or arrangement may benefit—

(a)	a public hospital in which the member is employed; or
(b)	a company or other body in which the member has a beneficial interest that does not exceed 1% of the total nominal value of beneficial interests in that company or body.

134J. Improper use of information

A person who is, or has been, a member of
HPV must not make improper use of any
information acquired in the course of his or
her duties to obtain directly or indirectly any
pecuniary or other advantage for himself or
herself or for any other person.

Penalty: 5 penalty units.

134K. Delegation

HPV may, by instrument, delegate to a member or an employee of HPV any of its powers except—

(a) the power to make, amend or revoke purchasing policies under section 134;

(b) this power of delegation.

Division 5—General

134L. Directions of the Minister or Secretary

(1) The Minister may give directions in writing to HPV in relation to any of its functions or powers.

Health Services (Health Purchasing Victoria) Act 2001

s. 8 Act No. 18/2001

(2) Without limiting the subject-matter of

directions under sub-section (1), directions
may be given setting limits or controls on
expenditure, borrowing and entering into
contracts and joint ventures.

(3) The Secretary may give directions in writing

to HPV regarding the terms and conditions
on which HPV may employ staff.

(4) A copy of each direction must be included in

HPV's report of operations for a financial
year under Part 7 of the Financial
Management Act 1994.

(5) HPV must comply with each direction of the Minister or Secretary.

134M. Strategic plans

(1) HPV must, at the direction of the Minister and at the time or times determined by the Minister, prepare and submit to the Minister

for approval a strategic plan for HPV's

operations.

(2) A strategic plan must be prepared in

accordance with the guidelines established

by the Minister from time to time.

(3) The Minister may—

(a) approve a strategic plan; or

(b) approve a strategic plan with amendments; or

(c) refuse to approve a strategic plan.

(4) HPV must advise the Minister if it wishes to

perform its functions in a manner
inconsistent with its approved strategic plan.

134N. Existing supply contracts

Health Services (Health Purchasing Victoria) Act 2001

Act No. 18/2001 s. 8

(1) A public hospital is not required to comply with an HPV direction or a purchasing policy to the extent that the direction or policy is inconsistent with the terms of any

contract relating to the supply of goods or services to the public hospital entered into before 1 July 2001 and in force on that day.

(2) However, a public hospital must not agree to

a variation or novation of, or exercise an
option to extend or renew, a contract referred
to in sub-section (1) on or after 1 July 2001
without the written consent of HPV.'.

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Health Services (Health Purchasing Victoria) Act 2001

Endnotes Act No. 18/2001

ENDNOTES

†

Minister's second reading speech—

Legislative Assembly: 5 April 2001

Legislative Council: 15 May 2001

The long title for the Bill for this Act was "to amend the Health Services
Act 1988 in relation to the supply of goods and services to health or
related services, including public hospitals, to establish Health Purchasing
Victoria and for other purposes."