Can we repair Europe’s health care systems through value-based procurement?

  • Posted on 17.06.2015

Can we repair Europe’s health care systems through value-based procurement?


Yves Verboven

Director Market Access and Economic Policies, MedTech Europe


Editors’ Note: This blog is part 1 of a series on the MEAT value-based procurement project, an initiative that advocates towards a shift from price-based procurement of medical technology 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 2 and part 3. If you would like to contribute please contact the MedTech Views editorial team at [email protected].

MedTech Europe has partnered with The Boston Consulting Group to define a new framework for most economically advantageous tendering in medtech. 

One of the major challenges we face as a society is growth in the demand for, and cost of, health care services; growth which continues despite myriad efforts by governments, health systems, and payers to contain it. At the same time, quality of care is highly variable. For example, if you were to undergo a radical prostatectomy even in the Netherlands, you would want to choose your hospital carefully. The worst performing hospitals there have nine times higher complication rates post-surgery than the best performing hospitals. This variation in outcomes is by no means an exception, and it highlights the lack of focus and lack of data on what patients care about most – outcomes.

In their book “Redefining Health Care,” Michael Porter and Elizabeth Teisberg define value in health care as “the health outcomes achieved per dollar spent”, a definition that lays the foundation for value-based health care. This concept is increasingly being applied as the key paradigm by which to measure health delivery. It has the potential to align all stakeholders: patients, clinicians, policymakers, payers and industry around a common viewpoint, and is an especially attractive way to shift the thinking from considering cost and budget-constraints to investing in value. This idea has been changing minds all over the world, with some more innovative countries, such as Sweden, even moving towards outcomes-dependant reimbursement.

Value-based health care is a great concept, but in order to achieve impact at the health system level, it must be applied to the key decision processes that make up care delivery. One of the most critical decisions is the procurement of products or services by health care providers. By choosing one product or service over another, procurement officials are impacting the care being offered and incentivizing the whole industry to act in a specific way. Given this enormous influence, procurement should be leading the effort to focus on value. Unfortunately, this is far from being the case. Procurement is plagued by many systemic issues: a siloed approach, misaligned incentives, strong pressure to reduce direct expenditure, and, more often than not, complete lack of concern for the patient or the longer term economic implications. As potential and actual patients and taxpayers, this should be a worry to us all.

However, there is reason to be optimistic. Several hospitals, and even health systems, have started including outcomes and longer term cost impact in their procurement considerations. For example, a Norwegian hospital group which was having issues with its syringes included an outcomes testing phase in its procurement process. They had faced high perceived pain levels for patients, as well as many product failures (breakages) and decided to test for this when purchasing new syringes. A panel of clinical users, mostly nurses, evaluated various syringes as part of the tendering process, based on patient reported pain levels. This enabled them to take patient outcomes into consideration as well as other qualitative criteria, along with the total costs (including cost of replacing broken syringes), so as to ensure the best value for the patient, the medical staff, and indeed the entire hospital group.

Although such examples exist, they are not widely disseminated and have not yet become widespread practice. With this in mind, MedTech Europe is launching a project together with The Boston Consulting Group to define a methodology for the tendering of medtech products. The aim is to define a framework capturing key procurement criteria and defining “most economically advantageous tender” in the context of medtech. The main focus will be on the core of value-based health care – patient outcomes and the total cost of creating these outcomes. But the criteria will also reflect other benefits for patients, health professionals, hospitals, and health systems, as well as broader societal considerations such as the environment, social responsibility, innovation, and socioeconomic impact of health.

This holistic framework will be accompanied by a practical, highly customizable tool to capture the key concepts and support contracting authorities in developing their tender documents. Through this value-based procurement method, we hope to make the best practices the standard practices for tendering, and to realign purchasing processes to what really matters: best value for patients, health professionals, hospitals, society, and even our economy.

We are working with a broad set of stakeholders, including contracting authorities, policymakers, and the medtech industry, in developing this methodology to ensure it is in line with regional health and procurement policies and the needs of the people involved in procurement processes on a daily basis. We very much look forward to engaging a broader audience during our value-based procurement conference on September 22 and 23 in Lisbon. We hope to see you there.

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