Rising healthcare costs, rapid technological and scientific developments, a growing need for patient added value, and increased attention for sustainability (such as in the ICT sector) –these are all present challenges for hospitals. But did you know that these are aspects that can be given an extra boost through healthcare procurement? That correct, carefully implemented procurements can contribute to social added value and solutions to (expected or future) problems? Given the scale of healthcare procurement, the key to the solution may lie here.
There are numerous practical examples of this, e.g. for fixed and mobile telephone services and for servers and storage systems. In addition, several UMCs reopened a tender for hardware for office automation and medical workplaces in late 2020. Finally, initiatives are being developed for the joint procurement of medical devices and medicines.
But how is that done? As a procurement officer at a UMC, how can you provide the social added value that is so sorely needed? Below, we provide 5 practical tips and tricks for UMCs seen from a broad perspective of procurement and contracting.
(1) UMCs unite!
Working together increases the capacity to map ambitions and wishes, and the associated bottlenecks in practice. After all, two know more than one.
The contract can then be put out to tender, whether or not after a market consultation, with the bottlenecks being explicitly included. The various UMCs can make use of each other’s knowledge and skills, as well as jointly hire expertise, in order to keep the costs as low as possible. An additional advantage of this collaboration is the economies of scale: the UMCs procure with more knowledge and expertise and the contract becomes more attractive for market parties due to its size.
The Dutch Federation of University Medical Centres (NFU) is actively engaged in the joint procurement of medical devices and medicines and in the improved organisation of purchasing processes through the NFU procurement cooperation programme. The examples given in the introduction were primarily supervised by the NFU.
Cooperation between UMCs does mean that for each tender, attention must be paid to the obligations to justify the contract, such as the cluster ban in Article 1.5 of the Public Procurement Act, but also to aspects of competition law.
(2) Involve market parties especially in the preparation of a tender!
In practice, improvement and innovation often take place when the bottlenecks on both sides are known and can be discussed. It is therefore certainly worthwhile to share the problems identified by the UMCs transparently with market players. UMCs may be surprised by existing solutions or innovations from market players. These may be out-of-the-box solutions or simple adjustments. Conversely, it can also be helpful for a contracting party to know where market parties see bottlenecks that impede or could in fact accelerate developments.
A recent example from the construction industry is the Heijmans construction company. This company invests in CO2-neutral building materials in order to continue building during the nitrogen crisis and to contribute to the implementation of the Climate Agreement. In procurement proceedings where a contracting authority sets high standards in terms of sustainability, the contracting authority with the state-of-the-art knowledge of Heijmans would probably be able to apply and achieve higher ambitions.
Involving market parties can take place during a market consultation (without a tender), but also before and during a tender. A market party may even act as an advisor and help draft the tender documents. In the event of bottlenecks, consultation with market parties during the tender procedure is also desirable. There are various tender procedures with contact moments for that purpose, such as the competitive dialogue, the innovation partnership or the competitive procedure with negotiation. The statutory tenderprocedures can be further shaped through procurement methods such as Best Value Procurement ("BVP”), also referred to as “Performance Procurement” (in Dutch: “prestatie-inkoop”). Maastricht UMC+ and UMCU are already successfully applying this form of healthcare procurement.
(3) Long-term rather than short-term thinking
At the moment, procurement is mainly concerned with the (financial) costs and benefits in the relatively short term. However, when the focus is on a larger scale, i.e. in the long term and with multiple investments, the social and financial gains will become visible sooner.
An example is the silent Intensive Care Unit (“ICU”). An excess of unnecessary alarms puts (extra) pressure on ICU staff and has a negative impact on patient welfare. An investment in a system that filters the alarms or makes them audible only to the staff is not attractive in the short term, but in the long term it can lead to more peace and quiet for ICU staff and ICU patients, with all the beneficial consequences this entails.
A parallel can be drawn here with youth care, in which preventive intervention (at a relatively low rate at an early stage) can prevent high costs of intervention at a later stage.
(4) Avoid vendor lock-in
A common problem with tenders in the healthcare sector is the so-called vendor lock-in. This is the phenomenon whereby market parties are dependent on one supplier for follow-up purchases or expansion products. In practice, whether or not deliberately, one particular supplier is then the predetermined outcome.
A (partial) solution to vendor lock-in is open-source software. This means that everyone can use the software and easily adapt it to the requirements and wishes of the UMC concerned. This offers flexibility for the future and prevents the UMCs from having to choose at the next tendering round (in a vendor lock-in) between (i) continuing with the supplier concerned; or (ii) having to purchase an entirely new ICT system. There are also other ways of avoiding vendor lock-in. It is important to identify this problem as a risk in the original market consultation or tender procedure, possibly with the solution already prescribed by the UMCs.
Hard vendor lock-in or not: it is wise to look for common interests and create incentives that encourage the supplier to keep performing. In addition, Maastricht UMC+ rightly endorses the importance of sufficient substantive counterweight during the tender procedure, for example by involving employees with substantive knowledge and market expertise.
(5) Just do it
Any deviation from a traditional approach leads to risks. At the same time, there is no tender without risks: there are always risks before, during or after the tender procedure. It is therefore important to take a critical look at the current practice and to list the advantages and disadvantages of adjustments. Risks, if any, can be identified and mitigated as far as possible – whether or not in consultation with market parties before, during or after the tender procedure. Our practical tip is therefore: dare to take well-considered risks in order to make the best purchase.
More information about the rights of healthcare providers in healthcare contracting and the possibilities of their branch associations to support them? See zorgcontractering.com.
