Purchasing Value: Purchasing and Supply Management's Contribution to Health Service Performance

Erik van Raaij

ERIM Inaugural Address Series Research in Management from Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.

Abstract: Many countries across the globe face the challenge of increasing healthcare costs, often increasing faster than GDP or personal income. In an effort to manage these costs, but also to improve the quality and accessibility of healthcare, governments have introduced a purchaser-provider split in the healthcare system. Healthcare financers, such as local governments, employers and health insurers exercise the role of healthcare purchasers. They select and contract providers, and manage buyer-supplier relationships with contracted providers. This is what I call purchasing of care. At the same time, purchasing for care takes place. Healthcare providers, such as hospitals, clinics and family doctors select and contract suppliers of clinical and non-clinical goods and services, and manage relationships with these suppliers. Both types of purchasing and supply management in healthcare need to be executed professionally, in order for a healthcare system to remain financially sustainable. I argue that a high level of purchasing maturity is needed, especially in purchasing of care. High-maturity purchasing starts from the perspective of the end customer, which is the patient in the healthcare sector. Purchasing of care and purchasing for care should both be oriented towards achieving the best value for the patient, which means the best possible health outcomes per euro spent. Purchasing and supply management in healthcare needs to develop from a low trust zero-sum game to an optimal trust positive-sum game with purchasers aiming to realise patient value with supplier-partners under the most favourable conditions.

Pages: 50
Date: 2016-10-14
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Citations: View citations in EconPapers (4)

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