• Purchasing professionals are more likely to choose cheap medical devices over ones with extra features that improve long-term efficacy
• Hospitals have become increasingly reliant on single-use medical devices over the past 30 years
• 3D printing technology could ease time and financial pressures on hospitals, but more flexible legislation is needed to encourage innovation.

Money does not grow on trees – and nor do ventilators. The challenges healthcare providers face in procuring vital resources were thrown into sharp relief by Covid-19. Barely a month after the World Health Organisation designated the outbreak as a pandemic, The New York Times reported “dire” shortages of even the most basic healthcare supplies; protective masks, gowns, and eye gear. Whilst the world has, thankfully, returned to normal in recent years, the healthcare sector still operates under significant pressure, particularly when it comes to budgets and supplies.

Difficulties persist at the national and international level. Britain’s National Health Service reportedly spends around £8 billion on buying medical equipment and consumables per year, yet a report by the National Audit Office suggests the organisation in charge of procurement (NHS Supply Chain) is not yet fulfilling its potential to deliver the right products at the lowest sustainable prices.

Meanwhile, European suppliers of medical devices complain it is becoming impossible to win public contracts in China. After launching an investigation in April, the EU is contemplating potential tit-for-tat measures in response to China’s stringent certification processes and clauses to safeguard national interests. Hopes persist of sparking fresh dialogue with Chinese officials, as European exporters of everything from X-ray machines and pacemakers to contact lenses and sticking plasters watch closely.

Amidst this whirling, sometimes stuttering, trade in catheters and ultrasound scanners, research from leading business schools sheds light on three procurement issues for healthcare services.

Choosing between price vs effectiveness

Buying a defibrillator can easily cost over £750. Whilst this might not sound like much, with the British government announcing plans to purchase 1,000 more for areas most in need in 2022, the scale of the pricing problem begin to become apparent. And defibrillators are just one of thousands of vital pieces of equipment needed by healthcare services. Budgets soon become maxed out, and purchasers are faced with deciding whether to go for cheaper medical devices or more expensive options with improved long-term efficacy.

Research from Aalto University School of Business, Rotterdam School of Management Erasmus University, and Bath University School of Management, reveals purchasing managers tend to gravitate towards lower-cost devices.

The researchers draw their findings from an experiment in which over 1,300 UK-based purchasing managers, medical professionals, and general managers were offered a choice between two different pacemakers to bulk-buy. The first was a cheaper basic model and the second was a more expensive alternative with additional infection-reducing qualities.

“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.”

– Katie Kenny, doctoral researcher at Aalto University School of Business

In a hypothetical scenario, participants were told they would gain a personal bonus on cost savings if they chose the cheaper device. In this situation, the researchers find purchasing managers pick the cheaper option without the increased effectiveness, while medical professionals do not.

The researchers are concerned by this finding, as healthcare procurement in Europe is increasingly the responsibility of purchasing managers.

“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,” says Katie Kenny, a doctoral researcher at Aalto University School of Business and co-author of the study.

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, despite the device’s added features. This made medical professionals more likely to choose the device with added long-term efficacy but purchasing managers’ decisions were unaffected.

“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,” says Katri Kauppi, Associate Professor in Logistics and Supply Chain Management at Aalto and another co-author.

Reliance on single-use medical devices

Single-use medical devices have been a major area of commercial growth in recent years, according to a KPMG report published in 2023. They are typically sterile-packed, so do not require extensive preparation before use in hospital settings, ensuring there is low risk of infection and improving efficiency for medical staff. After use, they are usually incinerated.

However, research from Rotterdam School of Management, Erasmus University, finds that switching to medical devices that are reprocessed, repaired, and recycled could help to reduce hospital expenditure and decrease damage done to the environment when disposing of single-use tools.

The study, conducted by Masters graduate Mels Arnoldy, analyses over 500 common single-use devices and provides comprehensive evidence that reusable medical devices are associated with lower costs and a smaller environmental impact than devices designed to only be used once.

“Over the past 30 years, hospitals have become more reliant on single-use medical devices with linear value chains that start with manufacture and end with disposal.”

– Mels Arnoldy, Masters graduate from Rotterdam School of Management, Erasmus University.

“Over the past 30 years, hospitals have become more reliant on single-use medical devices with linear value chains that start with manufacture and end with disposal. Many of these medical devices are made of complicated combinations of materials that make it difficult to deal with the waste they produce, so they contribute to environmental pollution,” says Arnoldy.

“Ultimately, they negatively affect global health, which is a big paradox as this is what the healthcare sector should protect, and, in addition to this paradox, linear value supply chains are expensive and vulnerable to disruptions, which can be disastrous for hospitals.”

Based on the findings, he makes several recommendations for healthcare decision-makers.

The first step is to implement a track and trace policy to identify which single-use devices could be swapped for reusable ones, he says. Second, he advises that more research should be conducted on life cycle analysis and life cycle costing, which can be powerful methods for advocating a more circular supply chain model. Third, the social and environmental impact of different devices should be monetised, to better illustrate which options are more sustainable. Fourth, significant investment should be directed into making the switch to using recyclable medical devices.

Investing in 3D printing technology

Also known as “additive manufacturing”, 3D printing has developed to a point where it is widely used across several industries, including in the healthcare sector to create medical devices, implants, prosthetics, and more. A news article by City, University of London, reports the European medical 3D printing market was estimated to be worth £432 million in 2022.

Yet, an analysis by Dr Marc Mimler, Senior Lecturer in Law at The City Law School, finds several gaps and uncertainties in current EU legislation and case law on the adoption of 3D printing in healthcare settings. His findings suggest that while the law aims to protect patients, more flexible regulation may be needed to encourage innovations that improve patient care.

This would be an important leap forward, as a study from Durham University Business School, ORT Braude College of Engineering, and the University of Southern Denmark, finds that introducing 3D printing technology in hospitals can ease time and financial pressures.

“The decision to implement 3D printing in hospitals or to engage service providers will require careful analysis of complexity, demand, lead-time criticality, and the hospital’s own objectives.”

– Dr Atanu Chaudhuri, Associate Professor in Technology and Operations Management at Durham University Business School.

It is also associated with improving surgery success rates by enabling teams to print 3D models based on an individual patient’s surgical needs, providing more detailed information for the surgeon to plan and practice the surgery, minimising the risk of error or unexpected complications, according to the study.

Dr Atanu Chaudhuri, Associate Professor in Technology and Operations Management at Durham University Business School and one of the researchers, says 3D printing also speeds up patient recovery time because 3D printed implants can be designed to fit each patient perfectly, helping the body to adopt them quicker and without complications. This, in turn, reduces costs for both the hospital and patient.

Surgical procedures can also be conducted more swiftly and efficiently because 3D printing could provide surgeons with custom-built tools for each procedure. The researchers find that surgeries with durations of four to eight hours were reduced by 1.5 to 2.5 hours when patient-specific instruments were used. This could enable hospitals to potentially schedule a greater number of surgeries each day, cutting waiting lists.

Of course, the natural question circles back to price, and whether 3D printers are a worthwhile investment. To help answer this question, the researchers also developed a framework to help hospital decision-makers decide whether this technology would be a good fit for their particular institution.

“The decision to implement 3D printing in hospitals or to engage service providers will require careful analysis of complexity, demand, lead-time criticality, and the hospital’s own objectives,” says Chaudhuri.

So, how can healthcare services continue adapting to environmental concerns, technological innovations, and changes in purchasing behaviour, with limited finances at their disposal?

Fortunately, some of these challenges contain the answers to others. For instance, adopting reusable medical devices could help hospitals go greener and also save money. Medical professionals must find creative ways to harmonise the quality of service they aspire to offer with the kind of service they can afford.

Meanwhile, it is the responsibility of healthcare leaders to keep a firm grip on their budgets. Where necessary, they must choose which devices are the highest priority at a given moment. Where possible, they must implement new technologies that will improve efficiency.

Charting an approach that embraces innovation while remaining financially astute is the only way to avoid medical staff once again warning they are “at war with no ammo”.

By, Jamie Hose

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