For decades, the healthcare Procurement landscape has been marked by a perennial tension between Providers and Suppliers – provoked by a lack of quality data, arduous and inefficient processes (invoicing and other) and an absence of market visibility and price parity. The result has been a fragmented market, which, unsurprisingly, has incurred higher costs for both Trusts and Suppliers.
Of course, it is widely acknowledged that the principal obstruction here has been a lack of digital integration within the healthcare industry as a whole; cumbersome legacy systems and cultural blocks have shackled organisations and prevented them from digitising.
The combination of such elements has created a frustrating and expensive Procurement environment.
From Spreadsheets to Shopping Baskets
But – really – why does shopping have to be so hard for organisations, when it’s so easy for us as consumers? As individuals we can compare prices across different brands in seconds and enjoy an intuitive online experience without any complicated systems, so why do Procurement teams endure spreadsheets? Imagine if we had to do that every time we ordered anything online…
Whilst once this may have been considered a naïve query that fails to capture the nuances of Procurement, new technologies are now eliminating room for excuses. Simply put, digitisation doesn’t have to mean total upheaval of systems, nor should ‘online shopping’ for Providers equate to Excel.
Our answer is straightforward and, arguably, obvious: an online B2B healthcare marketplace.
The Marketplace Community
The concept of an online marketplace is a familiar one. In essence, it is little more than the digital cousin of the Ancient Greek agora –where goods are sold by artisans within a communal marketplace and grouped by product type. The shopper can then complete their entire purchasing in one place.
Although typically B2C, like in retail where marketplaces are taking the industry by storm (at least certainly in Asia), the model can easily be adapted for a B2B audience.
Which is precisely what we at Virtualstock have done with our platform The Edge4Health™.
Inspired by retail best practice, The Edge4Health is a cloud-based online community where Suppliers upload their entire product catalogue (once) with clear photos, product information and pricing. Healthcare Providers then ‘shop’, with full visibility of pricing, available items and stock, supported by simple product searches, helpful images and more (like Amazon, but where the Provider is the typical Consumer).
The benefits are evident and extend beyond the question of an enjoyable shopping experience. In a marketplace, Suppliers can showcase all their products and trade with as many Providers as are connected, whilst Providers enjoy comparative pricing, so they can buy products at the best price.
Building and Respecting Relationships
In such an environment, new relationships can be made, broken and rebuilt quickly and seamlessly. Meanwhile, old contracts can also be incorporated into the platform, so that buyers and sellers can continue transacting and build upon previous relationships.
The way it works is straightforward: contract pricing is agreed outside of the platform between the Buyer and Seller and uploaded to the system. Then, if new contracts are agreed, the updated pricing can be added to system and approved quickly.
The Supplier is totally in control of monitoring and managing pricing expiration, where pricing should be updated in before expiration date (otherwise, the price reverts to the agreed contract price). And where no pricing agreement is reached, the Supplier can decide how they wish to proceed (i.e. continue selling at same price or terminate the contract).
As such, The Edge4Health supports Supplier autonomy both in terms of list pricing and contracts – although in the latter case Trust approval is also sometimes needed.
In addition, as more and more Trusts adopt the platform, those Suppliers who wish to continue their contracts with said Providers will of course have to do so via the system.
The mechanism of The Edge4Health is reliant on quality product information, which we place at the heart of all our operations. Because we believe that by capturing accurate information at the very start of the process, we can help establish a fully automated end-to-end supply chain for healthcare organisations, from catalogue management right through to instant payment processes, engendering a seamless user experience.
To help speed up the journey, we have already incorporated a GTIN (global trade item number) checker, which will automatically verify product integrity, significantly reducing the margin for Supplier error. More widely across the industry, the GTIN validation will also play a critical role in ensuring patient safety in the case of product recall or defective items, where individual products will be easily and quickly traced. Historically, the inability to track and trace products due to lack of accurate data has put thousands of patients at risk.
The back-end of our marketplace will also be supported by a PIM2Pay (‘P2P’) functionality, which, thanks to our partners at Previse, will help flip orders directly into invoices.
With enriched and accurate data, we can connect all the disparate parts of buyer and seller supply chains and bring them together on a single platform, for total visibility and control with little need for human attention.
In light of the current drive towards healthcare digitisation with Lord Carter’s targets looming in October, The Edge4Health marketplace is a quick way for NHS Trusts to rejuvenate their operations and drive efficiency.
By connecting just once, Trusts can implement best practice Procurement operations, whilst overcoming numerous barriers to digital transformation. Indeed, the principal challenges of cost, culture and complex systems dissolve in the face of an agile, intuitive platform with the outcome of a compliant, efficient and cost-effective operation. And the outcomes are great indeed; we anticipate that The Edge4Health will contribute significantly towards helping the NHS save up to £1B a year, as identified by Lord Carter’s review.
And, by encouraging a mutually beneficial, symbiotic relationship between Buyers and Sellers, the Healthcare agora animates a competitive market and a unified industry. Because, as always, The Edge4Health objective is to help improve each and every part of the healthcare supply chain for a better employment of time and resources.