From the January/February 2022 issue of HealthCare Business News magazine

VBP, which is closely linked to the ‘most economically advantageous tender’, or MEAT, concept is a framework for cost-effectiveness intended to yield the ‘best’ price but not necessarily the lowest price. Utilizing a VBP framework may not cost less but will increase value to both hospitals and patients in the long run. O’Connor touched on this, saying he is concerned about the increasing prices of technologies. Those that offer value-based outcomes may be too expensive to be pursued in the inflation environment we are currently experiencing. This then slows the advancement of VBP. Today, more than 50% of focus in tenders is on price and in some instances, the product solution that would deliver the best outcome exceeds initial budget expectations. Although this may return the initial investment and more, this is a risk for some organizations.

Vamstar has seen an increase of VBP language in imaging tenders over the last ten years, albeit still a relatively small share of tenders in total (see figure). Vamstar’s NLP can identify this language embedded in the documentation, despite the fact that these tenders are not labeled as VBP. The language that GE has been seeing includes: an end customer with a focus on value, a transformed and developed procurement practice completely aligned to the customer and measurement systems (discussed below). O’Connor commented that despite this increase, the quantity is not yet enough to overcome the significance of pricing. Some tenders have 5-10% of criteria centered on outcomes but 50-70% is on price. VBP remains a rarity, with only some exceptions. Countries in Europe, including Wales, Spain and Scotland, are launching “Innovation Projects” as a part of the European Union’s Recovery and Resilience funding initiative. The focus of these discussions is care pathway reform, for cardiology and oncology specifically. Although currently difficult to achieve, O’Connor expects that VBP will increase in use over time. For example, when discussing the minor dent in the growth trajectory of non-price criteria that Vamstar noted, O’Connor was certain that the dip was a result of the pandemic and would be temporary. He emphasized that, to create sustainable health systems, we must move past price focus and into outcome-based focus, both of which VBP can achieve.

January/February 2022 Magazine

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