Innovation Lifecycle Management: Procurement Models

Healthcare sector is moving towards a great evolution - moving away from ‘traditional’ lowest price procurement strategies and product buying to value-based procurement models. Healthcare delivery organizations are showing a noticeable shift towards quality, services, and solutions by adopting innovative technologies. This, however, affects sustainability of today’s health care systems forcing them to explore innovative procurement models such as value-based procurement models. The focus of value-based procurement in healthcare is to ensure delivery of high-quality healthcare services and solutions to patients and moving away from the traditional lowest price procurement strategies and product buying. Value-based procurement delivers whole-life cost savings and service improvements across product pathways beyond traditional, narrow price-based measures. Fixed-price procurement arrangements can reduce production costs than cost-plus procurement arrangements by inducing far greater efforts.

Adoption of innovative procurement models into hospitals’ systems can help achieve defined outcomes like quality, safety, and cost of care delivery.