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Value Based Procurement

VALUE-BASED
PROCUREMENT

PUTTING VALUE AT THE HEART
OF PROCUREMENT

Everything we do at Abbott starts with putting people first. We help keep their hearts healthy by developing innovative technologies with the potential to improve the way hospitals treat people with vascular diseases. We start by putting people, and value, at the heart of healthcare. Our products and solutions are designed to deliver better quality and safety in healthcare as well as optimal patient outcomes and long-term efficiency.  

Increasingly, purchasing trends are moving away from a focus on price-only procurement models to a holistic approach that puts emphasis on benefits for people, providers, hospitals and society along with products’ life-cycle costs. This is called value-based procurement. To support this, the European Union (EU) introduced the Most Economically Advantageous Tender (MEAT) framework with the EU Public Procurement Directive 2014/24/EU.1

This approach assesses the value of a solution for patients, physicians and hospitals against its total life-cycle costs, using quality, socioeconomic and sustainability criteria. It is all about finding the best value for long-term investment rather than looking at current purchase costs alone. It will help make our healthcare systems sustainable again – and now is the time to make that happen.

VALUE-BASED PROCUREMENT

WHAT IS VALUE-BASED PROCUREMENT

Purchasers are increasingly intermediaries between administrations struggling with rising costs and tight budgets, and physicians looking for innovative solutions and products that can improve patient outcomes. 

As healthcare costs are rising in Europe2, purchasers face the constant challenge to stay focused on the bigger picture. This includes the optimisation of patient pathways, valuable diagnostic and treatment tools to support physicians, and cost efficiency. Value-based procurement seeks to strike a balance between the needs and desires of both hospital administrations and physicians. It is an approach that keeps sight of the long-term needs of people, physicians and hospitals, prioritising the quality and total cost of care over short-term gains. When talking about value-based procurement, it is crucial to define a common understanding what value means.

One approach, which was developed by Harvard University’s Professor Michael Porter, divides outcomes that matter to patients by the purchase and life-cycle cost of a device or healthcare solution.3 This could for example mean selecting products, devices or solutions that deliver higher quality, or require less aftercare and re-interventions as well as shorter hospital stays, thus reducing overall costs for hospitals.

Meat

THE MOST ECONOMICALLY ADVANTAGEOUS TENDER (MEAT) IN PRACTICE

To support value-based procurement in practice, the EU introduced the Most Economically Advantageous Tender (MEAT) framework with the EU Public Procurement Directive 2014/24/EU. Since the 2014 reform, the European Commission officially endorses to base award criteria of public contracts on the MEAT approach.

The MEAT framework

Ensuring the best price-quality ratio, MEAT criteria may focus on qualitative benefits for people, providers and hospitals as well as environmental, innovation and socioeconomic considerations. Qualitative benefits may include a patient’s swift recovery and wellbeing, the easy use of a device and reduced costs in training, simplified care pathways and savings in overall healthcare costs.2

In order to ensure overall best value, MEAT criteria under the EU Public Procurement Directive 2014/24/EU1 include life-cycle costing of a product or service, which covers:

Costs borne by hospitals or other users

This may include acquisition/purchase costs; costs of use (energy consumption and other resources); maintenance or storage costs; and end-of life-costs, such as collection or recycling/disposal.

Costs attributed to the environmental footprint

These costs are linked to the product, service or works during its life cycle, provided their monetary value can be determined and verified. They may include the cost of greenhouse gas emissions or other climate change mitigation measures.

Following the MEAT framework, the following aspects can be
taken into account1:

QUALITY

Including technical details that benefit the patient’s recovery and wellbeing; aesthetic and functional characteristics; accessibility; design for all users, social, environmental and innovative characteristics; and trading and its conditions.

Organisation, qualification and experience of staff assigned to fulfil the contract

Where the quality of the staff assigned can have a significant impact on the level of performance of the contract.

After-sales service and technical assistance

Conditions such as delivery date, delivery process and delivery period or period of completion.

Talk to us

Talk to Abbott Vascular

At Abbott we can support you in making the shift to value-based procurement. We put value at the heart of healthcare, and MEAT is the opportunity for us all to make it happen.

In February and November 2017, Abbott hosted roundtable discussions with experts from hospitals, procurement authorities and other stakeholders from across Europe. The aim was to start identifying potential solutions or ways to implement new concepts supporting sustainable health outcomes and the role of resourcing and value-based procurement approaches. You can see the conclusions of these discussions on our issue briefings on 'Making Value-Based Procurement a Reality in Healthcare' and 'The Role of Resourcing Models in moving Value-Based Procurement forward'.

Contact us

References

1. Directive 2014/24/EU of the European Parliament and the Council.

2. Gerecke G, Clawson J, Verboven Y (2015). Procurement – The unexpected driver of value-based healthcare. Boston Consulting Group / Medtech Europe.

3. Porter ME. What is value in health care? N Engl J Med 2010; 363:2477-81

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