Why Value-Based Procurement Matters in Healthcare

Value-Based Procurement (VBP) is reshaping how healthcare systems assess and acquire products and services, marking a significant shift from traditional cost-focused models to those that emphasise long-term value and outcomes. For businesses in HealthTech and MedTech, understanding and adapting to this trend isn’t just beneficial—it’s essential.

What is Value-Based Procurement?

VBP is a procurement approach that prioritises value over cost. Instead of evaluating solutions based solely on their upfront price, organisations focus on the overall value they provide. This includes factors such as improved patient outcomes, increased efficiency, and reduced long-term costs. It aligns closely with value-based healthcare, which seeks to maximise health outcomes for every pound spent.

In practical terms, VBP requires suppliers to demonstrate how their offerings deliver measurable benefits that extend beyond financial savings. This could mean highlighting how a solution reduces hospital readmissions, supports integrated care, or aligns with sustainability and digital transformation goals.

The UK Healthcare Context

In the UK, where the NHS grapples with growing financial pressures, workforce shortages, and rising patient demands, the move towards VBP reflects a strategic shift. This trend signals an opportunity for companies selling into the NHS or similar systems. However, the bar is higher: it’s not enough to have a cost-effective product—organisations must prove how they contribute to strategic priorities, such as:

• Improving clinical outcomes.
• Delivering long-term cost savings.
• Supporting the transition to integrated care systems.
• Aligning with sustainability objectives or digital health strategies.

For sellers, this means a deeper understanding of NHS procurement goals and aligning value propositions accordingly.

Different Interpretations of VBP

The interpretation of VBP varies by region and sector. In some contexts, it might emphasise lifecycle costs—focusing on durability, maintenance, and replacement expenses. In others, the focus shifts to measurable patient benefits, such as reduced recovery times or improved quality of life. Understanding these nuances is critical for HealthTech and MedTech companies aiming to enter or expand within the UK market.

What VBP Means for Sellers

Companies targeting healthcare systems adopting VBP must adapt their strategies to remain competitive. Here are some critical steps:

1. Evidence of Effectiveness
   Provide robust clinical data and case studies that demonstrate improved patient outcomes, such as reduced complications or faster recovery times.
2. Highlight Cost Savings Over Time
   Showcase how your solution reduces overall system costs through efficiency gains or lower long-term expenses, even if upfront costs are higher.
3. Align with Strategic Goals
   Ensure your product or service supports broader healthcare objectives, such as reducing hospital admissions, enhancing interoperability, or contributing to sustainability initiatives.‍
4. Customised Value Propositions
   Tailor your pitch to the priorities of individual healthcare systems, reflecting their unique challenges and goals.

Seizing the Opportunity

For HealthTech and MedTech companies, embracing VBP isn’t just about meeting procurement requirements; it’s about positioning your brand as a trusted partner in improving healthcare delivery. Those who adapt their offerings to fit this model can unlock significant opportunities within the NHS and beyond, particularly as VBP gains momentum.

As this trend continues to evolve, staying informed and proactive will be key to navigating the changing landscape of healthcare procurement. By focusing on long-term value, your organisation can align with the needs of healthcare providers and, ultimately, the patients they serve.