of the COVID-19 pandemic sent, and continues to send more than two years later, shock waves throughout the global supply chain. No entity was insulated. Suppliers and health systems alike must consider how their existing structures and business models will cope with a changing environment. They must also consider what change(s) is/are necessary as they replenish their stockpiles, rebuild and redeploy a depleted and exhausted workforce, and reintroduce themselves to a healthcare marketplace that has dif- ferent expectations and needs as a result of COVID-19.


Preparing for the future As we slowly begin to emerge from the fog of COVID-19, we envisage that healthcare ecosystems in 2031 will be characterized by: • Increased demand and limited capac- ity – With aging populations, late-stage disease detection and diagnosis, and more complex comorbidities as result of the long-lasting impact of COVID- 19, healthcare systems will continue to experience increased strain on their resources and demand for services. There is pinned up demand with an estimated reduction in use of health- care services of up to 70% during COVID-19.3


• Fewer healthcare workers – The COVID-19 pandemic exacerbated the shortage of healthcare professionals. In some regions of the world (e.g., Canada, the United Kingdom), COVID- 19 exposed limitations with respect to pay, progression, reward, and migration of healthcare workers from developing countries. This resulted in a thin workforce being stretched beyond its means. Furthermore, healthcare employment rates were lower than the previous year-to-date numbers. The psychological toll COVID-19 had on healthcare workers has caused many to reconsider their current and future aspirations of being a healthcare professional.4,5


• Digitally transformed – With techno- logical adances in the form of artificial intelligence (AI) systems to aid diag- nosis, greater use of robotic-assisted surgery devices, and the widespread and rash adoption of telehealth solu- tions, healthcare delivery will look quite different in the future. Hospital- at-home programs, currently viewed


as a luxury and sustained competitive advantage will be commonplace. The unanticipated shift from in-person to virtual healthcare for diagnostics, assessments, and evaluation and management is here to stay. This will require health systems to reconsider their operation model and suppliers to redesign their distribution channels in preparation for direct-to-consumer/ patient arrangements.


PEOPLE & OPINIONS provided as part of


a total package.


Here, suppliers will be paid not for products but for procedures and out- comes – i.e., value-based procurement arrangements based on clinical evidence. Considering, the strained relationships between providers and suppliers as result of supply shortages, communica- tion breakdowns and broken promises during the pandemic,7


crossing the


• Increase use of day case/outpatient and minimally invasive surgery – Greater alignment and use of commu- nity-based services will be needed to support the continued focus on day cases. This is partly driven by the belief that minimally invasive surgery is a conduit for decreased postoperative complications for common procedures and overall cost reductions.6


• Increased federal intervention and regulation on “Big Medtech” and Healthcare sector – Pressure to pro- vide environmentally sustainable healthcare that removes waste from the system and acts responsibly in provid- ing affordable healthcare continues to mount.


• Free market forces – Increased com- petition and challenges for healthcare providers to reduce costs demanded by payers, while also managing expecta- tions of a more educated patient/con- sumer, with all stakeholders expecting improved health outcomes and lower costs.


So what does this mean for suppliers? For one, it means VBP must be a reality and baked into the way they do business with providers. Reality-based strategic VBP for the


win: As the value agenda emerges, group purchasing organizations (GPOs) are recognizing the limitations of price based practices in supporting healthcare. After all, one thing COVID-19 taught health systems and suppliers is that getting the best product price or having the best- priced product, respectively, is necessary but insufficient. his is especially true when – and if – clinicians cannot get the product when needed. It is also true even when the product is available, but it does not sufficiently meet the needs of the clinician or patient.


As a result, it is our view that the demand will transition from procure- ment of “products” to “solutions,” whereby consumables/devices are


chasm from transactional relationships to more strategic relationships needed for value-based procurement will be a daunting task. However, we believe the need and desire for greater supply chain resiliency will serve as the impetus to help providers and suppliers repair their damaged relationships.8


A number of organizations have been


considering value-based approaches, and we caught up with one to see how they are advocating for VBP and advancing the conversation. BD (Becton Dickinson and Company) is a global medical device company with an inter- est in the development of VBP across the markets they serve as a means of deliver- ing improved healthcare outcomes and lower cost. However, one of the com- mon challenges they have encountered is that alue is ill-defined by health systems, particularly by procurers who struggle in many cases to recognize the difference between Economic Valuation versus Value (i.e., what does it cost versus what does it provide and avoid [negative effects]).


Two steps to provide value To advance true value-based arrange- ments, requires commitment by both buyer and supplier or vendor to change, albeit suppliers may be in a better position to lead the way, as BD is seek- ing to do, by taking responsibility for demonstrating value. Our view is that this will include adopting an evidence- based approach, that clearly articulates and justifies the value proposition in terms of a measurable improvement in patient outcomes, increased efficiency and a reduction in the total cost of care. Suppliers then need to commit to work in partnership with the health system to ensure the benefits are realied. This will require suppliers to: Build in value – Don’t market theo- retical value – In supporting existing clients looking to build value proposi- tions for health systems, currently there


hpnonline.com • HEALTHCARE PURCHASING NEWS • July 2022 61


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