Value-Based Procurement: What’s in It for Provider Supply Chains?

Before life with social distancing and face masks, you may remember that health systems were already straining under the weight of increasing demand and the push towards improved patient outcomes and experiences. All of this was set against a backdrop of limited financial and human resources. To date, healthcare procurers globally have responded to these challenges largely by playing “hardball” with suppliers to drive down product prices.

As time in the COVID-19 capsule progresses, healthcare procurers have continued to flex their procurement muscles by leveraging common tools of the trade, such as standardization, aggregation and price-weighted competitive tendering. As a result, procurement professionals are in danger of becoming victims of their own success.

Another issue is the limited, if not non-existent, impact of price-based strategies on the numerous emerging supply chain problems highlighted by the COVID-19 pandemic. This healthcare and social crisis has amplified the need for rapid and radical change in the way we deliver healthcare.