Value-based procurement to transform MENA healthcareValue-based procurement to transform MENA healthcare

The economic burden of diseases in the GCC region is estimated at over US$50 billion, with Saudi Arabia and the UAE accounting for the most, at US$24.5 billion and US$11 billion, respectively. With the focus of governments to promote and ensure the well-being of residents, there has been a marked increase in healthcare expenditure over the years, yet the burden of diseases leads to a productivity loss of nearly US$18 billion annually.

According to a report by Alpen Capital, the healthcare expenditure in the GCC is projected to increase to US$104.6 billion in 2022, a CAGR of 6.6 per cent from 2017, which was also compounded by the impact of the COVID-19 pandemic.

As one of the first regions across the world to recover from the aftermath of the pandemic, there has been a rigorous and concerted focus on enhancing healthcare delivery standards through multiple pathways, including the integration of advanced technology solutions and embracing digitisation.

New trends have evolved, such as the demand for telemedicine quadrupling in volume in the UAE, while the private sector is focusing on cost optimisation and reassessing business plans and projections.

There is also increased emphasis on promoting preventive care and addressing the rising incidence of non-communicable diseases such as diabetes, chronic respiratory diseases, cancer and cardiovascular diseases, which accounted for direct and indirect costs of more than US$67.9 billion in 2022.

Value-based healthcare as a pathway to better healthcare

One of the pathways to building a robust, effective and cost-efficient healthcare ecosystem is pivoting to value-based procurement (VBP), which calls for a mindset change, as well as a commitment to building stronger foundations, starting with procurement.

With increased interest and a move to adopt the concept of value-based healthcare (VBHC) globally, it is important to first understand and define it. In essence, VBHC is about focusing more holistically on outcomes while providing cost benefits for all healthcare stakeholders.

The Harvard Business Review described it as ‘the strategy that will fix healthcare’ defining value as “the healthcare outcomes achieved that matter to patients relative to the cost of achieving those outcomes.”

VBHC, according to the World Health Organization, will entail transformation across three interconnected areas – delivery, funding and community (see Figure 1). The delivery aspect covers increased patient engagement, enabling truly integrated care that places patients at the centre of the network and delivering continuous, coordinated and multidisciplinary care.

Figure 1

The area of funding looks at creating value-based procurement, reimbursement and insurance models that encourage the best care to patients, while the third pillar focuses on education and empowerment within society to enable people to take an active role in their own healthcare.

The role of value-based procurement

One of the foundational pillars of VBHC is the need for VBP, which emphasises reduction in total costs throughout the entire patient pathway without compromising on the quality of care (see Figure 2).

Figure 2

According to the UK’s NHS Supply Chain, VBP is a means of “driving sustainable increased savings and improving patient outcomes” by working with multiple stakeholders that will help reduce waste and the number of products used, enable patients to move from inpatient to day care, reduce infection rates and strengthen operational productivity.

VBP, therefore, considers the price of a product or service, the outcomes for patients, the reduced total cost of care and the benefits for healthcare providers, hospitals, the healthcare system and society at large.

For governments, this means embracing coherent models on the funding, administrative, organisational, service delivery and clinical levels. National health systems stand to benefit from VBP by enabling the comprehensive delivery of quality services that meet the multidimensional needs of the population.

Hospitals stand to gain from improved patient outcomes and cost optimisation. In short, it opens doors for a holistic and integrated healthcare model where patients are also engaged and empowered by putting them in control of the care process. It also shifts the focus from mere cost optimisation to an emphasis on patient outcomes, which is central to delivering quality healthcare services.

Embracing value-based procurement

The journey towards successful VBP starts with taking a medium- to long-term view of the expected success factors and broadening the definition of value from immediate cost savings, which ultimately have finite benefits, to one were health systems create and incorporate tangible, measurable improvements to the patient pathway that may improve efficiency, cost-effectiveness and patient outcomes. VBP should be driven by collaboration and cooperation with public and private stakeholders. Finally, it must engage clinicians and key opinion leaders, with the VBP model being aligned with the aspirations of all stakeholders.

VBP is not for the short term but is a proven, sustainable approach in which the impact of a service, patient outcomes, reduced costs of care and improved patient care are prioritised. Driven by data and focused on outcomes, VBP will play a transformational role in shaping the future of the region’s healthcare sector.

Brian Mangan is the Value-Based Procurement (VBP) Project Lead for the National Health Service (NHS) Supply Chain, UK, and Dr. Sara Al Dallal is the founder and first president of the Emirates Health Economics Society and Specialist at Dubai Health Authority.

This article appears in Omnia Health magazine. Read the full issue online today.