MEAT

VBP: The road from unwanted necessity to high impact strategic partner

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20 Jan 2020
Public procurement was established as a way of purchasing products that hospitals need. However, this one-dimensional view of procurement is changing very quickly. From humble beginnings as an obscure back-office function, I am pleased to say procurement is fast becoming a high-impact strategic partner for hospitals. What’s behind this shift? Traditionally, product price has been the key feature of a successful procurement process. A good price is important, but there are other elements to consider. The use of the most economically advantageous tender (MEAT) criteria offers scope to include quality and functionality of products and services. Of course, using criteria other than price increases the complexity of the tender, both for the customer as well as the supplier. So, is it worth it? At European Health Public Procurement Alliance (EHPPA), we believe the answer is ‘yes’. In my opinion focusing on price alone can obscure important value drivers. For instance, if you buy surgical gloves, and the focus is solely on price, you will get the lowest cost gloves. But is that a good deal for the hospital? It is not unreasonable to suggest that lower price means lower quality. If that means having to throw away gloves because they cannot be used, the cost of this should be part of the calculation. Using the MEAT criteria, quality can be calculated and incorporated into the decision on which glove to choose. Value-based procurement (VBP) goes one step further than MEAT. VBP is based on the idea that tenders should be evaluated based on what matters to patients. The introduction of VBP is a key priority of the EHPPA alliance. We would argue that this is also what matters to hospitals. This approach is rather difficult to apply if the starting point focuses on a particular product. VBP only works if...

Value-based procurement: a users’ guide to improving outcomes and delivering efficiencies in the UK

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23 May 2018
This blog is part 9 of a series on the MEAT value-based procurement project, an initiative that advocates towards a shift from price-based procurement towards value-based procurement. It does so by defining a Most Economically Advantageous Tendering (MEAT) framework that includes the value of medical technologies, services and solutions in procurement processes across Europe. Read part 1 , part 2 , part 3 , part 4 , part 5 , part 6 , part 7 and part 8 . Health systems across the globe are faced with unprecedented challenges. Demand and patient expectations are rising while financial resources are diminishing. To respond to these trends, we need a new approach to how we manage healthcare. At NHS North West Procurement Development, we have been looking at how rethinking procurement can deliver better outcomes for patients, increased savings opportunities, and wider operational efficiencies. We began exploring the principles and practices of ‘Value Based Procurement’ (VBP) in 2014. By working with the University of Liverpool and engaging with a wide range of stakeholders – including ICHOM, legal experts, suppliers and MedTech Europe – we have studied how VBP can work in practice and the changes needed to make it commonplace. New framework for change To move this process to the next stage, we have published a 30-page guide setting out the rational for embracing VBP, providing a framework for delivering change, and setting our vision for the future. We want this to inform the work of procurement officials and suppliers alike, to inspire health professionals, patients, policymakers and others to change how they think about preparing our health system for the future. Hospitals are busy places and there is rarely time to take a breath and consider reforming the system. That’s why we have aimed to make the new guide clear, concise...

How Public Procurement can Drive More Sustainable Healthcare

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21 Sep 2016
This blog is part 8 of a series on the MEAT value-based procurement project, an initiative that advocates towards a shift from price-based procurement towards value-based procurement. It does so by defining a Most Economically Advantageous Tendering (MEAT) framework that includes the value of medical technologies, services and solutions in procurement processes across Europe. Read part 1 , part 2 , part 3 , part 4 , part 5 , part 6 and part 7 . Who looks after human health – surgeon or public procurement official? The answer should be: both. The concept of Value Based Procurement helps us to explore the link between purchasing decisions and health. Implementation of the new Public Procurement Directive spurred discussion in the healthcare sector on how to define the best value of purchasing goods and services. While we are moving away from price-only criteria and there is some more emphasis on the overall cost of care delivery, we are still far away from obtaining most economically advantageous outcomes. Besides additional direct cost impacts driven by energy-use, cost of spare parts or disposal, one needs to quantify and take into account the savings derived from reduced patient’s length of stay, rate of readmissions, etc. This however does not capture all cost the society bears. What is also explicitly addressed by the new Public Procurement Directive, but often overlooked in these debates, are the environmental and social aspects of delivering patient care. Meanwhile, Sustainability issues such as clean air and water, and fair working conditions are fundamental contributors to population’s health and are valued by our society. This approach should be not only reflected in the delivery of care but also in purchasing practices. Such vision of health positions sustainability as an important policy objective and challenges a narrow scope of healthcare focusing solely...

Health systems produce value for citizens, the economy and society

Value
10 Jun 2016
This blog is part 7 of a series on MEAT Value-Based Procurement, an initiative that advocates a shift from price-based procurement towards value-based procurement in healthcare. It does so by defining a Best Price Quality Ratio method within the Most Economically Advantageous Tendering (MEAT) framework put forward in the European Public Procurement directive. Read part 1 , part 2 , part 3 , part 4 and part 5 and part 6 . Our health systems need reforms to maintain universal health coverage and, given the economic and demographic pressures we face, Europe cannot afford its citizens to be in poor health. This will require new thinking about the economic value of health for individuals, families and society (health as an economic good) in addition to the economics (the cost-efficiency) of healthcare systems. Instead of focusing on the costs of healthcare, we must consider what is delivered. The full value of investing in health and quality healthcare can be realised by focussing on health outcomes complemented and enhanced by the economic value offered by being in good health and having cost-efficient health systems. This value-oriented approach can be implemented when purchasing health technologies. It is already seen in some modern procurement procedures resulting in the highest economic value in addition to best health outcomes. These most economically-advantageous tenders (MEAT) can deliver optimal value to society. To make informed decisions about what constitutes value, we need to consider the full value that health investments bring – not just the outcomes for patients or for hospitals, but the full impact these interventions can bring to society by keeping people in good health. Defining value The real economic consequences of being in a state of ill-health are not solely related to the direct costs of health and care, but include wider socio-economic consequences and...

Can the EU directive on public procurement encourage value-based procurement in healthcare?

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27 Apr 2016
This blog is part 6 of a series on the MEAT value-based procurement project, an initiative that advocates towards a shift from price-based procurement towards value-based procurement. It does so by defining a Most Economically Advantageous Tendering (MEAT) framework that includes the value of medical technologies, services and solutions in procurement processes across Europe. Read part 1 , part 2 , part 3 , part 4 and part 5 . When the new EU Directive on public procurement was finalised in 2014, replacing the previous framework, it was hailed by the European Parliament as a tool for ensuring better quality of supplies and services and value for money. The European Parliament was also keen to emphasise how the Directive was designed to encourage innovation, improve SMEs’ access to public sector markets and to integrate environmental and social considerations into procurement policy. One of the tools within the Directive to achieve these aims was the requirement for contracting authorities to base the award of contracts on the most economically advantageous tender (MEAT). Contracting authorities were also permitted to use lifecycle costing in their award criteria in order to assess total costs. Previously, tenders could be awarded either on the basis of lowest price, or on MEAT criteria which typically included a balance of price and quality criteria. All of this seemed to be good news for those of us with an interest in value-based healthcare. Defining what MEAT really means However, whilst the terminology was promising, it was misleading. Indeed the Directive provided that MEAT could be based either on price only, cost only, or best price quality ratio. Although Member States have been given a choice when implementing the Directive into national law whether they wanted to exclude or restrict the use of price or cost only as the sole...

Shift to value-based procurement must come from the top

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2 Mar 2016
This blog is part 4 of a series on the MEAT value-based procurement project, an initiative that advocates towards a shift from price-based procurement towards value-based procurement. It does so by defining a Most Economically Advantageous Tendering (MEAT) framework that includes the value of medical technologies, services and solutions in procurement processes across Europe. Read part 1 , part 2 and part 3 . Procurement officials can play an important role in delivering better value for hospitals and healthcare systems. They can do this by doing what is most economically advantageous while simultaneously fostering innovations that benefits patients. However, they need a clear signal from management and policymakers encouraging them to think strategically. If procurement departments are tasked solely with ensuring that hospitals are supplied with products at the lowest price, that is what they will do – and they will do it very efficiently. But that is not really what the hospital wants. Hospitals want to reduce overall costs . Somebody needs to go to the procurement department and tell them this! Procurement specialists need a new mandate; they need to transition from being a service department to being a strategic department. Modern procurement professionals need to understand workflow and how products fit into the healthcare ecosystem. They cannot do this alone. They need a clear signal from management and a willingness from all parties, including doctors, to engage early and often on how best to serve the hospital. Value for hospitals Applying the principle of the Most Economically Advantageous Tender (MEAT) is an effective way to use procurement as a tool for getting value for hospitals. In Sweden, we have been using this approach in 95% of tenders since 2006. Based on my 10 years of experience, I have seen how MEAT can be a win-win: good for...