procurement

In recent years, there has been increasing attention on how we can address the biggest challenges in healthcare: variation in patient outcomes, unsustainable cost increases, and low-value care. As populations age and the rates of chronic diseases rise, we have no choice but to rethink how we get value from healthcare spending. In January, MedTech Europe and the Boston Consulting Group published their joint report ‘How Procurement unlocks Value-Based Healthcare’ on the current state of play regarding Value-Based Procurement (VBP) in Europe. VBP focuses not only on the price of a particular product or service but also on the overall value it can create. This should consider the value to patients (improved outcomes), value to payers (reduced total cost of care), and to health workers and healthcare providers (more efficient use of time and expertise). By taking a value-based approach, procurement can become an important lever for improving the quality of care while supporting the financial sustainability of healthcare systems. Wanted: bold action The MedTech Europe/BCG report points to growing momentum across Europe, with VBP being successfully implemented by several leading healthcare providers. There are encouraging examples of medical technologies being procured using the key principles of VBP. Organisations are establishing multidisciplinary teams that are motivated to find the best solution – not just the product with the lowest purchase price. Despite these encouraging words, VBP is not yet generally applied across Europe and the report points to several critical actions that need to be taken. Eliminating the true ‘root cause’ of unsustainable healthcare costs requires a paradigm shift in procurement. Hospital expenditure on medical devices and medicines amounts to approximately 20-30% of total expenditure, leaving 70-80% to other expenses. These involve mainly the cost of hospital staff to provide the ‘core’ care delivery services, but also the cost of...
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...
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...
I wonder, have you ever had a conversation with your doctor or nurse about barcodes? Not likely, I guess! Whilst the humble barcode is so ingrained in everyday life (after all, we all scan barcodes at the checkout), its potential in healthcare is both enormous, but unfortunately largely unknown. The reality is that for patients and caregivers, the beep of a scanned barcode has the possibility to help ensure that a patient receives the right medical product at the right time and that caregivers have the benefit of additional surety in their processes. Scanning barcodes can help to minimise errors due to incorrect identification of product or patient and ensure the correct product is in the hospital when the patient needs it. The global, voluntary user community, GS1 Healthcare - which brings together all healthcare supply chain stakeholders, including manufacturers, distributors, healthcare providers, solution providers, regulatory bodies and industry associations - recently produced a video to illustrate the value global standard barcodes add in hospital processes. For every one of us, this is a must-watch - after all, at one point in our lives, we will all be patients. For staff of healthcare product supplier organisations this is even more important. After all, suppliers are applying GS1 barcodes to meet a range of regulatory and trading partner requirements. In turn, these barcodes should be used by all healthcare stakeholders, most importantly, the healthcare provider organisations and staff that are issuing these suppliers’ products to patients. Please take two minutes of your time, open your minds and remember that the use of global standard barcodes in healthcare empowers all of us - patients, healthcare provider staff and healthcare provider organisations. A simple scan can contribute to doctors and nurses being able to focus even more on caring for every one of...
As ‘thinking season’ kicks off, the focus is on how technology and big data can deliver better value healthcare to more people than ever before. January is a time for reflection, planning and predicting what lies ahead. It’s the season for assessing the mega-trends that will shape our future and working out how we will respond. Perhaps the most prestigious venue for future-gazing is Davos where world leaders from politics and business gather on 17-20 January for the World Economic Forum . Here, global influencers will look at how prevailing economic, social and political forces present challenges and opportunities for all of us. Last year, the key phrase from Davos was the ‘ 4 th Industrial Revolution’ . The WEF set the tone for thousands of conversations on the topic last year, including at the MedTech Forum in Brussels last December. This year – with the convergence of technologies that blur the lines between the physical, digital and biological systems still very much in view – the theme will be Responsive and Responsible Leadership . But what can healthcare leaders expect from 2017? When it comes to healthcare , the WEF frames the conversation with some key demographic statistics: - By 2050, the world’s population will have risen to 9.7 billion - 2 billion people will be over the age of 60 To continue to meet the (growing) demands of healthcare consumers without blowing up healthcare budgets, new ways of delivery services will be required. Smarter, more efficient, technologies and systems will be essential. This brings us to the concept at the heart of many new-year health policy forecasts: value . Value-based healthcare has been something of a buzzword since it was coined by Harvard’s Michael Porter . Most of us have an intuitive sense of value. In healthcare, Porter...
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...