Hans Bax

My name is Hans Bax, 51 years of age, and since February 1st supporting Medtech's Market Access & Economic Policies team on (MEAT) Value-based Procurement. I am holding over 25 years of (international) experience in procurement and supply chain management, especially in health care provider organisations. Before joining Medtech I have been representing the GDEKK, a Cologne-based healthcare GPO, holding responsibility for all Dutch activities and was head of procurement at the University Medical Center Groningen (Netherlands). Besides supporting the MEAT Value-based Procurement project, I am lecturer on Public Procurement and Tendermanagement at NEVI, the Dutch Association for Purchasing Management.

In healthcare, the traditional role of procurement was to secure the availability of goods and services needed to deliver care. Once this was achieved, procurement moved one step up the ‘pyramid of procurement activities’: negotiating on product prices and discounts, in order to reduce spending on medical devices and consumables. In recent years, things have moved on. Procurers have engaged with internal multi-stakeholder interests when tendering for new contracts. This has helped to make procurement, in itself, an important business function. Looking back at how things have evolved, I think we have already come a long way. In fact, it has been quite some time now since purchasing decisions for medical devices were made only by doctors. These days, healthcare institutions cooperate at national level in the area of procurement in order to achieve greater efficiency (distribution of activities) and effectiveness (bundling of purchasing volumes and obtaining better purchasing conditions). We have even seen the first examples of cross-border cooperation: German Group Purchasing Organisations (GPOs) entering the Dutch market; EHPPA, a partnership of several European GPOs; and private clinics organising their procurement activities from a central hub, to name just a few. Despite this dramatic change for the better, I believe the ultimate objective for procurement (‘the top of the pyramid’) should be to take a strategic role: contributing to patient-centric, sustainable healthcare across Europe. However, when pooling of activities, knowledge and volume is narrowly applied only to lowering product prices, procurement misses out on achieving its full potential. Procurement cooperation offers a unique opportunity to adopt innovative procurement approaches much faster and with greater impact compared to single healthcare providers. Furthermore, by including (patient) outcome criteria in tenders, procurement can have a major impact on both the improvement of healthcare outcomes and the total cost of delivery – not...
To my mind, the overarching challenge of modern healthcare systems is to increase the value and outcomes of care, not just to control costs. As someone keenly interested in procurement, this leads me to question what it all means for how health systems buy the technologies they need. In a competitive healthcare system, like the Netherlands, healthcare provider organisations are increasingly establishing organisational strategies with clear objectives. By applying value-based procurement (VBP), which puts the primary focus on improving patient outcome, procurement systems are tasked with selecting the one(s) out of many medical devices available on the market (or to be developed) that contribute the most to the improvement of these outcomes. Identifying the outcome advantages to the stakeholders involved and finding the corresponding proof is crucial – but at the same time, very challenging – for procurement to do. Prescribing desired outcome levels, collecting outcome data and various indicators involve a lot of precious time and increase transaction costs. And of course, quite often there is a simple lack of consensus on valid and standardised measurement of ECO (economic, clinical & operational) outcomes. I believe that taking a best value approach, thus giving suppliers a proactive role in procurement, may help advance our field and deliver on the shared goal of improving outcomes. First, it is up to procurement professionals and provider organisations to determine together what outcome they wish to achieve or improve through the purchase of a specific product or solution. This could include reduced mortality, length of stay, improved patient satisfaction or increased staff efficiency, for example. Reaching out to the supplier market may also be of help here. Ideally, these objectives should be well alignedto the healthcare provider’s overarching strategic goals. Next, suppliers should be asked to submit their proposals and to identify how their...
VBP blog series
The essence of travelling, either by foot, train or plane, is replacing one's existing location for another more desired or needed one. But why do we do it? Sometimes it's the appeal of a new destination – perhaps a ski resort or a tropical island. On other occasions, the decision to move away is driven by a realisation that the current location is no longer sustainable. In healthcare, there is an emerging sense of urgency that it's time to move. You'll be familiar with the reasons: increasing demand for health care services, rising healthcare expenditure and unwanted outcome variations among healthcare provider organisations have put most European healthcare systems under pressure. I've been exploring the potential role of procurement in accelerating our journey to a better place. Traditionally, the focus of procurement was buying those products and services needed at the lowest price possible. Indeed, in some EU member states this is still common practise. However, with the transposition of the 2014 European public procurement directive into national law by all 28 EU member states, we now observe a trend of procurement slowly, but surely, selecting medtech products based on a consideration of both price and (product-) quality. Price as the sole factor influencing the buying process is a thing of the past; quality is taking its place. On average, 42% of medtech procurement processes included quality criteria in 2016. France, UK, Ireland and the Netherlands are leading the way with more than 80% of their awarded tenders based on quality versus cost. In addition, this value for money equation is legally the preferred awarding criterion in a limited number of EU member states already, such as the Netherlands and Finland. I see an even more encouraging trend: the application of pre-tender consultations, the use of competitive dialogue tender procedure...