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 just the price of products.
Another interesting example of cross-European collaboration is the Value-Based Procurement Community of Practise. This collaborative initiative offers opportunities for both European procurement authorities and the medtech industry to cooperate on the development and adoption of value-based procurement in order to partner for patient-centric, sustainable healthcare.
As we work together to embrace this new paradigm in healthcare, it is important that we come together to discuss how we can accelerate the necessary shift in procurement practice. That’s why I am looking forward to meeting you all at the 1st European Value-Based Procurement Conference in Brussels on December 12, 2019.
I see this as an important step forward in the evolution of procurement in European healthcare. Let’s hope it is the first of many.