VOLUME TO VALUE — THE EVOLUTION OF MEDICAL DEVICE PROCUREMENT Aligning Value

Learnings from an international procurement roundtable

By Gabriela Prada, director of Global Health Systems Policy, Global Government Affairs at Medtronic


Gabriela Prada

More than 50 healthcare leaders gathered in January in Barcelona to discuss how procurement is increasingly used to support value-based healthcare (VBHC) efforts.

Value-based procurement (VBP), an approach that involves making purchasing decisions based on overall value (health outcomes, quality, service, and cost) rather than cost alone, is gaining prominence in Europe and delivering on its promise.


...the procurement function is evolving to become a strategic component of innovation and sustainability in healthcare.


INTERNATIONAL PROCUREMENT ROUNDTABLE

Public procurers from 11 countries shared their experiences and provided inspiring examples that demonstrated how procurement is being used as a strategic lever to achieve hospitals’ and health systems’ goals. This reflects how the procurement function is evolving to become a strategic component of innovation and sustainability in healthcare.

Important lessons emerged from the candid discussions among procurement experts, administrators, and clinicians.

  1. Adoption barriers. The participants acknowledged the difficulties of adopting VBP within a context of a volume mindset and reimbursement and clinical models not consistent with VBHC. However, they shared that successful VBP projects have resulted in key stakeholder groups (including clinicians) advocating for models of healthcare delivery, business, and reimbursement that reward better outcomes. Therefore, successful VBP projects are showing that outcome-based tendering offers impetus to change reimbursement models and clinical pathways to align more broadly with VBHC objectives.
  2. Public funding. European and Canadian experience showed that public funding programs are providing upfront investments needed to align stakeholders’ positions, VBHC models, and procurement practices. At least half of the successful projects that were discussed received funding from the European Commission or the Ontario Government to experiment with innovative procurement models. Funding helped to acquire expertise, support training, implement robust stakeholders’ consultations, and test tools that not only enabled the implementation of the projects with success, but also increased their VBP capacity.  
  3. Procurement professionalization. The need for greater professionalization of the procurement profession was identified as critical. Implementing VBP requires capabilities, skills, and business ambitions. It was suggested that the lack of the appropriate mindset in the public sector often leads to missed opportunities when engaging with private corporations. But when public procurers are equipped with the knowledge and tools to shift from volume to value, their mindset and behaviors change. This shift was perceived as critical because it directly empowers people to act.
  4. Competitive dialogue. The value of competitive dialogue and other outcome-based competitive procedures to enable VBP was undeniable. However, these methods are often lengthy, complex, and expensive for procurers and companies (particularly due to lack of expertise on how to implement them). To address this problem, the United Kingdom has been experimenting with solutions framework agreements with success. This approach is not without challenges, but it is promising and a good alternative that deserves consideration as jurisdictions master their VBP skills.

No doubt progress is being made in defining and advancing VBP across jurisdictions, but much work remains, starting with a consensus of what constitutes value in the context of medical device procurement.

A PROPOSED MODEL FOR FUTURE PROCUREMENT

To steer this conversation, we have suggested a model depicting the evolution of the procurement landscape. In this evolution, the greatest value (better healthcare outcomes) requires a more complex strategy involving new clinical pathways and business models that incorporate devices and services. This model suggests how procurement is moving away from outsourcing towards strong partnerships where public and private sectors are both accountable for better healthcare outcomes. The examples from Catalonia, Denmark, Norway, and Canada shared in Barcelona demonstrated how these partnerships are changing today’s healthcare.

This roundtable left the participants energized and inspired, thanks to the public procurement leaders for sharing their wisdom, representatives of the World Bank, the European Commission and ICHOM for contributing their vision and thoughts, and our partners (AQuAS, University of Zaragoza, and MedTech Europe) for making this event possible.


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