Cheap beats efficacy when buying devices
By a staff reporter
Price is more important than long-term effectiveness when purchasing medical devices.
That is the finding of research from Bath University School of Management, Finland’s Aalto University School of Business and Erasmus University Rotterdam.
Researchers presented over 1,300 medical professionals, purchasing managers and general managers in the UK with a hypothetical choice between two pacemakers to bulk-buy: a cheaper basic model and a more expensive model with infection-reducing qualities.
In the experiment, participants were given a scenario in which they gained a personal bonus on cost savings if the cheaper device was chosen.
In this hypothetical situation, the researchers found purchasing managers chose the cheaper option without the increased effectiveness, while medical professionals did not.
Researchers have expressed concern by this finding because healthcare procurement in Europe is increasingly the responsibility of purchasing managers.
Aalto’s Prof Katri Kauppi, a co-author of the study, said: ‘The results show it is important to align internal incentives for purchasing managers and medical professionals with the incentives of suppliers in a way that makes everyone strive towards healthcare effectiveness.’
Katie Kenny, another co-author and a doctoral researcher at Aalto University, added: ‘While not every purchasing decision is a matter of life and death, looking at price in procurement decisions has a human cost and indirect economic effects.’
The researchers also found risk-sharing agreements influenced purchasing decisions.
In another hypothetical scenario, purchasers were offered the opportunity to share post-operation treatment costs with the manufacturer of the more expensive pacemakers if infections still occurred.
This made medical professionals more likely to choose the more effective device, but purchasing managers’ choices were unaffected.
Juri Matinheikki, a co-author at Aalto University, and chief specialist to the Ministry of Finance in Finland said: ‘Health benefits, including their economic importance in terms of labour inputs and tax revenues, should be better valued so they can be taken into account in procurement alongside short-term price savings.’
This research was published in the International Journal of Operations & Production Management.