Value-Based Procurement (VBP) is a relatively new approach to the procurement of innovative goods and services that offers procurement professionals the opportunity to support clinical teams to deliver better, measurable outcomes that matter to patients within the resources available. By focussing on getting the best value from the product or service rather than just getting the best price, they can contribute to improved overall system financial sustainability and better patient and population health, which in the medium term will reduce (or at least mitigate the rise) in spending on healthcare.

Health systems around the world face the significant challenges of growing demand, complexity and cost of care, but constrained human and financial resources, many are turning to Value-Based Healthcare (VBHC) as a way of achieving financial sustainability and improving outcomes for patients and populations within the resources available.

The procurement of Medicines, Medical Technologies, Diagnostics and Digital Healthcare is the greatest xpenditure for health systems after salaries and wages and so is a critical component of the health ecosystem. It is now recognised that a relentless focus on the lowest price in procurement may not be achieving the best value for patients or their health systems.

Why this insight?

Value-Based Procurement requires both technical and cultural change in how procurement teams, provider clinicians and suppliers interact. It is important that trust is built between suppliers and their customers to facilitate the success of this very different way of procuring innovation and is akin to a longer-term partnership to solve problems facing clinical teams rather than a short term, transactional interaction to purchase a product.

VBP is a new and different way of working for procurement professionals, their provider customers, clinicians and life sciences industry suppliers. Initially it will be more resource intensive and complicated, and it will take time for procurement professionals and suppliers to become skilled and confident in the approach. This “learning curve” can be shortened by high quality educational programmes, research and evaluation of completed Value-Based Procurements. A willingness to share learning within the procurement community about what worked, what did not, and the reasons for that is essential. All of this will build trust within the ecosystem and allow initial small-scale and less complex Value-Based Procurements to be expanded to larger scale and ambition, ensuring that the greatest value is achieved through the procurement process, whilst incentivising industry to continue innovate to meet the needs of patients and the challenges of modern healthcare.

If you liked this article and want to know more, don’t miss the Procure4Health Insight #9: The use of Value-Based approaches to Innovation Procurement. It can be found on the Procure4Health Community platform.

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