Value-based purchasing facilitates decision-making to efficiently incorporate innovation into the system
Incorporating technologies provided by strategic alliances between hospitals and industry are an efficient and effective means to promote innovation, according to experts gathered at ESADE.
Barcelona, June 2, 2017
“In today’s economic setting, value-based purchasing has become key to facilitate decision-making when incorporating innovations within the healthcare system. Similarly, value-based healthcare not only takes into account costs but also the results on the health of and benefits for patients, healthcare professionals and the system,” explained María Luz López-Carrasco, President of the Spanish Federation of Healthcare Technology Companies (Federación Española de Empresas de Tecnología Sanitaria, Fenin) during the 23rd Health Technology Industry Conference held at ESADE. Jaume Collboni, Second Deputy Mayor and Commissioner of Business, Culture and Innovation in Barcelona Town Hall, was in charge of opening this event.
“Facing Healthcare Changes” was the theme of this year’s conference. The annual meeting is a reference in the industry and brings together professionals from the healthcare technology industry as well as other healthcare system agents, including healthcare professionals, managers, entrepreneurs and industry executives along with public administration officials. The participants debated on the opportunities the new digital era provides healthcare to be able to achieve greater sustainability. However, this is only possible so long as the healthcare system incorporates innovations that truly provide value and efficiency.
According to López-Carrasco, “only value-based healthcare will allow us to improve the efficiency of the care and treatment provided to chronic patients, those that currently consume 70% of healthcare budgets. In this respect, we have to take advantage of the opportunities that information and communications technologies provide and seek out new business models in areas that satisfy currently unmet needs.”
Francisco Longo, ESADE Deputy Director General, declared that, “even though the healthcare system is a story of success, it’s also a source of concern” and that, in this context, “healthcare technologies play a key role, but their cost is a significant component of healthcare bills.”
For his part, Joan Barrubés, Associate Director of the ESADE Executive Master in Healthcare Organisation Leadership (EMDOS), was responsible for the inaugural address entitled, “The 2016 economic setting and its repercussion on the healthcare industry.” He provided a general overview of the current economic setting which is threatening the sustainability of our healthcare systems. According to this expert, “since the start of the current economic crisis in 2008, public healthcare expenditures have dropped, representing 8.9 billion less than that spent in 2009. Over the next ten years, the healthcare system will need between 30 and 50 billion additional euros, almost double the current amount spent on public healthcare.”
Innovation for value-based healthcare
The new 2014 European Directive on government procurement includes the Most Economically Advantageous Tender (MEAT) concept, encouraging institutions and bodies offering public contracts to design models that include this principle in their tender processes. “This doesn’t necessarily imply the cheapest bid but the one that adds the greatest value to the process, the institution and patients. In other words, it implies bearing in mind the associated cost of using a given product and not just its sales price. It includes variables such as clinical results, the benefits for patients and other impacts on society, for example, the impact on the innovation system and the environment, etc.,” explained Laura Samprieto-Colom, Deputy Director for Innovation and Head of the Healthcare Technology Evaluation Unit in Barcelona’s Clínic Hospital.
There are numerous experiences in the European context with value-based purchasing. In some cases, these have focused on results and include risk-sharing. Others, by contrast, have incorporated criteria such as patient and/or healthcare professional opinions. For example, Canada and Sweden signed shared-risk agreements in 2011 for several of their hospitals. The Scandinavian country purchased dressings for pressure ulcers bearing in mind how frequently they had to be changed and the degree of complications for patients. For its part, Norway’s healthcare service began buying catheters a few years ago, taking into account their ease of use and their handling safety according to nurses.
The participating experts agreed on the need to meticulously analyse the benefits of innovation on healthcare provision. This includes the opinion of healthcare professionals, seen as a basic criterion when purchasing new technology. According to Samprieto-Colom, numerous procurement models can foment the industry’s innovative capacity: “In our country we have an innovative government procurement system, but it still hasn’t been implemented far enough and there’s still a long way to go. Another type of purchasing paradigm is the shared-risk model, which some Autonomous Communities are already using.”
The new patient: Empowered and digital
Patients will be the ones to benefit the most from healthcare’s digitalisation, taking on a more active and leading role in their own health. According to Carolina Rubio, Coordinator of IMPACT HUB’s Cluster for Patient Empowerment in Madrid, “we’re seeing more and more empowered patients that have the information, skills and motivation needed to, along with the healthcare team, take control of their own health. Educated and informed patients that are also mobilised and connected are more responsible in terms of their health and treatment when they have some type of chronic condition.” In this sense, technology can make chronic patients’ lives much easier, making it an essential ally. She added, “today, healthcare technology helps us reduce the size and mobility of the devices and even features warning systems for chronic patients to keep track of different indicators and variables related to their health. In addition, technology can also help them contact other patients and learn from their experiences.”
Digitalisation also represents an opportunity for doctors, who now have new diagnostic and therapeutic tools as well as new means to communicate with patients. According to Rubio, empowered and digitalised patients demand shared leadership over their health. “To achieve this, we have to mobilise and motivate patients as well as healthcare professionals. Trust, active listening, transparency, horizontality, knowledge and two-way communication are key factors to achieve this shared leadership.”
The digital world is transforming business models in every industry, not just healthcare. In the latter, “we need innovative minds capable not only of creating innovative technology but also absorbing it completely. This is why we have to adopt innovative business models that allow us to appropriately absorb this technology,” concluded Rubio.
Technological alliances in hospitals
The experts at the conference agreed on the need for management models which permit introducing technology that adds value to the healthcare system, professionals and patients. According to Francesc Iglesias, Deputy Director of Universitario Vall d’Hebron Hospital in Barcelona, “incorporating technology provided by hospitals’ technological alliances is an effective and efficient formula, something which makes the desperately needed two-way transfer of knowledge and innovative practices in the healthcare industry possible.” It’s also true that “the regulations and norms governing public institutions and their alliances represent a difficult means to contract equipment, given that these alliances can at times slow down contracting dynamics,” he added.
According to Iglesias, “there is a strong push for innovation within the healthcare industry, in general, and among hospital management, in particular, making it a strategic component of their actions. Currently, professionals are increasingly interested in knowledge and training in processes related to innovation management and the transferal of results. Without doubt, this innovation culture has taken root and is here to stay.”
There are several examples of these strategic alliances in Spain, serving as a model for future opportunities. However, according to Iglesias, “there’s still room for improvement in this area if we compare ourselves to other countries around us. According to the OECD, our country sill dedicates a small percentage of its GDP (approximately 9%) to public-private contracts. By contrast, the Netherlands doubles Spain’s figure, while Sweden, Finland, the United Kingdom and Germany dedicate over 12%.”