Can procurement deliver the ‘best value’ for money?

  • Posted on 24.06.2019

Can procurement deliver the ‘best value’ for money?


Hans Bax

Senior Advisor MEAT Value-Based Procurement

VBP blog series

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 product or solution contributes to the achievement of these objectives. Simultaneously, it is up to the bidder to show on what convincing evidence their claim is supported. Proof of the ‘pudding’ may be provided by past performance, research studies, expert opinions, ICHOM-data or even future piloting. 

Given the available financial budget and/or the total cost per solution offered, discussing and comparing the supplier-provided data ultimately results in the identification of the supplier offering the best product to be awarded the contract. 

Of course, we know this is complex and will not be achieved overnight – implementing VBP is a step by step process. Having said that, I firmly believe that procurement should not wait until it all has been organised and settled. We shouldn’t let perfection be the enemy of the good! 

I see a real opportunity here for procurement systems to make better use of the supplier’s expertise and really reaching out to them in order for procurement to move forward. By contributing in this way to the healthcare provider’s strategy, the unexpected outcome of applying VBP might be for procurement itself to become of strategic importance.



What is MEAT VBP?

Healthcare procurement often focuses only on upfront purchasing costs. This fails to address the needs of other stakeholders such as patients, providers, health systems and society as a whole. It also clouds the true cost of care and does not account for the economic value of health and care.

The MEAT (Most Economically Advantageous Tendering) Value-Based Procurement initiative places at its core the outcomes that matter to patients, quality and further benefits for providers, health systems and society. Instead of selecting the product with the lowest upfront cost, procurement authorities can factor the real value of a product into their decision making and obtain the most economically advantageous solution. The MEAT value-based procurement approach is aimed at overcoming organisational silos within healthcare institutions, reduce inefficiencies and spur innovation-driven investments.

The EU directive on public procurement encourages this smarter, more holistic approach to procurement and innovation. 

The 1st European Value-Based Procurement Conference A new paradigm in Health Care

The 1st European Value-Based Procurement Conference A new paradigm in Health Care will be held on 12 December 2019 in Brussels. Organised by the Value-Based Procurement Community of Practice (VBP CoP) and supported by EHPPA, EUREGHA and MedTech Europe, this conference will highlight the latest developments to incorporate “value” in decision making and the role of value-based procurement to integrate the value from the perspectives of the different healthcare stakeholders. Learn more here!


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