Sytemic Calls for Tender

© GHP

Infrastructure investments in the health sector often face manifold problems, ranging from incompatible equipment, lack of knowledge to operate it and insufficient maintenance. As a result, adequate medical treatment is hampered and scarce funds are used inefficiently.

 

The German Healthcare Partnership (GHP), founded in 2010 as a joined initiative of BDI and BMZ, is the voice and advocate for the German export-oriented healthcare industry. In this role, GHP is advocating for an innovative approach for tenders in the healthcare sector, creating a WIN WIN WIN situation for partner nations, their society and the German healthcare industry. This work is based on the Study “A Systemic Approach to better Health – Systemic Calls for Tender in the healthcare setor”, jointly conducted by BMZ, GIZ, KfW and GHP, finalised in 2014 and officially launched in 2015.

Everyone has found themselves in a situation where the price of a product alone accounts for their purchase decision: The one product is allegedly “cheaper” than a comparable other product. And sometimes, that’s the right choice. In many situations we value quality and service more than a cheap offer and are content to spend more money if it is feasible mid- or long-term. That is just one concept within systemic calls for tender.

There are many products and system units in the healthcare sector that require more training than just reading the user’s guide. Hospitals depend on well-trained personnel to guarantee smooth procedures and patient’s safety. Properly functioning medical devices are just as essential. Should there appear errors, it is important for the devices to be repaired as soon as possible. It shortens the waiting time for patients, ensures the readiness to treat emergent patients and benefits the overall economic performance of the hospital. If devices are unusable for a longer period of time, services cannot be offered, patients cannot be treated and the hospital loses money.

Systemic calls for tender take all these factors and more into consideration. Producers and distributors should be required to include training, service, maintenance and consumables into their bid. Moreover, GHP advocates to take into account life cycle costs (LCC) when calculating the overall and long-term costs of system units. A detailed calculation of LCC enable the potential buyer to foresee all the costs that will arise during the actual use and after the initial purchase, e.g. electricity, gas, water etc. Who, after all, would be willing to buy a cheap car if it is projected to consume three times the costs in petrol during the first 2 months which the buyer could have spent on a more fuel-efficient model?

The situation is similar with consumables and spare parts. The latter is especially important in regards to durable devices. The bidder should be required to guarantee the availability of spare parts for 7-10 years after purchase. To illustrate: Medical devices not uncommonly cost a lot of money (often in a 6 figure range). If one part of this device is broken, but there are no spare parts available, the hospital would have to buy a whole new device.

Systemic calls for tender are holistic. They take into account the whole system, not only the product or the device itself but the personnel, management and, most important of all, the patient. Through this holistic approach, true sustainability can be established in healthcare facilities around the word. Society profits the most: Healthy individuals are an important prerequisite for a functioning society and a growing economy in any region and any country.

Win Win Win

With the help of a systemic approach, a WIN WIN WIN situation can be accomplished:

WIN 1 – Tendering party / Partner Country Having successfully conducted a systemic call for tender and awarded a suitable bidder, the buyer acquired a high-quality health care facility. Due to comprehensive maintenance, service and training contracts, a long-term partnership is founded between the awarded bidder and the buyer. Well trained staff, functioning equipment and smoothly running operations help the facility to raise the standards by making a name for themselves. More patients will come for preventive procedures and treatment which leads to economic and social benefits.

WIN 2 – Patients and Society A better healthcare system and well equipped medical facilities make therapeutic measures more accessible. Diseases are easier to diagnose and can be treated with the help of reliable medical devices. Preventive measures help to keep the society healthy. Well trained personnel is capable to tend to the patients, even in emergencies. With high-quality care like this, patients are able to leave the facility faster and re-integrate into social, cultural and professional life. Trained staff raises the educational standard of the region.

WIN 3 – The awarded bidder Systemic calls for tender raise the standard for bidders. The demanded documents and qualifications (LCC assessments, international references etc.) make sure that bidders with low price products have to adjust. Competitive disadvantages for bidders of high-quality products with holistic approaches, e.g. as the German healthcare industry, are reduced.