Value-based procurement has been making global headlines over the past few years as more industrialized nations are looking for innovative solutions to tackle escalating healthcare costs.
Improved patient outcomes are at the heart of this.
Value-based Healthcare Initiatives
With value-based healthcare initiatives leading the way, the shift from volume-based services to patient outcomes is driving a new movement that has the potential to reinvent the future of healthcare.
Strategic, value-based procurement becomes an empowered ally of value-based healthcare and together form a united front that can make a difference in the lives of patients.
The Old Ways – Price-Based Procurement
The focus of traditional methods of procurement is on purchase price.
The lower the price, the better.
Most hospital purchasers buy their medical products and equipment on the basis of purchase price alone and don’t consider other factors that are relevant to meeting patients’ needs and outcomes.
Some procurement professionals admitted that patients are entirely factored out of the decision-making process when creating tenders for medical supplies and devices.
The patient, the receiver of the care, is obliterated right out of the equation.
Sadly, this approach is driven by short-term savings only and not on quality nor the total cost of care.
This lack of foresight leads to higher total costs for the hospital. Consider IV catheters that were purchased at a low price.
How can you factor in the additional costs and efforts needed to work with these low-quality IV catheters?
Failed Patient Outcomes
Issues such as easily broken catheters, difficulty in use, longer insertion times, patient discomfort, and increased risk of blood-borne diseases for staff can easily lead to increasing costs as well as failed patient outcomes.
Would these outcomes have been different if a higher quality IV set was purchased instead of this inferior one?
This is an area that price-based procurement does not address nor cares to worry about.
This traditional approach tends to be volume-based, fragmented, and transaction-based in nature.
Organizational Issues
Plagued by organizational issues such as disjointed silos within departments and hospitals, misinformed directives, and bureaucratic administrative obstacles makes this system doomed to fail.
A New Framework – Value-Based Procurement
Value-based procurement is an essential component of value-based healthcare.
One cannot work without the other. With patient outcomes as the driving force, this integrated method of purchasing focuses on the quality or value of care that is given to the end users of healthcare.
Patients are the key indicators to the success of this approach and is fueled by positive patient outcomes rather than purchase price.
Patient Outcomes
At the core of the framework is patient outcomes relative to the cost of meeting these outcomes. This includes the initial product price as well as the overall cost of care delivery.
For example, if purchasing a specific medical device can improve recovery rates from surgery, shorten hospital stays, and prevent a second hospitalization then this device would be a worthwhile purchase.
Positive Patient Outcomes
Not only are positive patient outcomes achieved but there would be overall cost savings as well.
A win-win for both.
Healthcare providers, hospitals, and patients can reap the secondary benefits from this holistic matrix as well.
Nursing staff and other healthcare professionals can appreciate higher quality medical products that are safer and easier to use.
Reduce Overall Costs
Hospital administrators have the opportunity to reduce overall costs for the hospital, and patients get to enjoy the added comfort and confidence of improved patient care.
There are many socioeconomic benefits as well.
In addition, there is often a co-creative process between hospital buyers and suppliers as they work together to identify key patient outcomes, improve healthcare performance, and enable exceptional patient care.
Value-Based Procurement in Action
In 2014, Karolinska University Hospital in Sweden issued a large, 14 year tender for medical imaging services such as MRIs, ultrasounds, and CT scanners.
Patient outcomes played a key role in this purchase as the hospital wanted more than just pieces of equipment. The tender’s criteria wanted the assurance of ongoing maintenance over the entire contract period and included specifics such as ongoing service commitments, upgrades, and replacement scanners if the other ones failed.
Of the five tender participants, only three fulfilled the requirements of this bid and were invited to engage in a competitive dialog format.
The decision for the bid winner was not decided on cost alone.
Philips, a supplier of such medical technology, secured the bid with the promise of attractive pricing, high quality machines, and establishing a R&D initiative geared towards improving patient outcomes in ten high-priority therapy areas within the hospital.
Philips was an easy choice as the supplier not only added value to the hospital but improved the quality of patient care as well.
References:
http://hscn.org/Data/Sites/8/media/1050-gabriela-prada.pdf
http://hscn.org/Data/Sites/9/presentations/05.17.2017-concurrent-3.2-kara-leblanc.pdf
http://www.medtecheurope.org/sites/default/files/resource_items/files/2017_MTE_BCG-VBHC-Procurement.pdf
http://www.medec.org/events/EventDetails.aspx?id=944139
http://journals.sagepub.com/doi/full/10.1177/0840470416646119
http://www.hospitalhealth.com.au/content/aged-allied-health/article/shifting-focus-from-cost-to-value-107425454#axzz4wafq4MXY