Optimising healthcare procurement and provision
Chris Stevenson assesses the procedures around healthcare service procurement and suggests the steps that both sides can take to improve methods and outcomes for everyone involved.
As a consultant who works with both sides of the procurement process, I am well placed to observe the various challenges faced by both procurement departments and healthcare communications agencies in trying to fulfil service needs. This article describes some of the potential pitfalls and the solutions that will lead to more successful outcomes for all.
The procurement perspective
One of the most common challenges for the procurement group is to clearly define the services required at the start of the process. Obviously, a mature brand will require different services to a potential blockbuster launch. Similarly, the need for medical writing is very different to the need for logistics or digital services. Then the brief and Request For Proposal (RFP) can be developed to focus on the specific skills and attributes needed.
There is a strong desire to understand the service provider, and it’s a pleasure to see the professional and thoughtful approach that is often taken. However, a lack of experience of how service providers operate, including a poor understanding of the implications of their business models on their costs and efficiencies, can often mean a superficial approach is taken to developing an RFP. In turn, this leads to a lack of detailed information about potential suppliers, and decisions being taken without knowledge of the differences between them.
Having completed the rigorous process of defining what you need, the critical next step is to understand what questions to ask to get specific information from potential suppliers.
“A checklist of key questions per supplier, not just a general list of questions, developed beforehand, is critical”
If a face-to-face process is built in to the procurement project, and I recommend that it is, this presents an opportunity to obtain detailed information about how the suppliers will operate and deliver against the brief. Too often I have experienced processes that are not structured, where questions are not thought through beforehand and opportunities to define the details of potential services and to define who will deliver those services are lost. A checklist of key questions per supplier, not just a general list of questions, developed beforehand, is a critical part of ensuring maximum value is gained from meeting in person. In addition, you should define who attends the meeting. Perhaps suggest that the most senior person in the agency attends the meeting, as the response to this request is often very informative.
Table 1 provides a few simple improvements to the procurement process that are likely to result in a more informed choice of supplier.
The responses from agencies to RFPs are often disappointing, superficial and uninformative. A recent example is the response to the question, ‘What makes your agency unique?’ We can, of course, criticise the question, but it allows the agency to define what makes it special, and we would expect agencies to relish this opportunity. It may surprise you to hear that in a recent review of the responses from eight major agencies to an RFP from a large pharmaceutical client, they all answered this question in the same way: ‘We are unique because we employ the best people’.
The answers to the RFP questions need to be informative, creative and driven by examples and references. A more rigorous approach to answering questions could make an agency unique in an RFP process.
Another, perhaps obvious, example is where the pharmaceutical company offers dialogue during the RFP process. In another recent case only half of the agencies did, and even then they were not as well prepared as they should have been. Clearly, if you are presented with the chance to build a relationship, it should always be taken. However, you must also be prepared; a list of detailed and specific questions is essential and, in addition, have a number of key statements ready that address the questions in the RFP too, because the procurement people may ask questions.
“You can answer RFP questions with specifics such as case studies, references and additional information that clearly define your capabilities”
Agencies may sometimes complain about the generic nature of RFPs. Nevertheless, you can answer RFP questions with specifics such as case studies, references and additional information that clearly define your capabilities. This is likely to elevate you above the competitors early on. However, be clear about the information you provide.
One agency stated it had 254 years of experience in a particular therapy area. This answer is not useful. It is better to state the number of staff, their tenure and seniority in the organisation and provide examples of their work. Most RFP processes will allow agencies to provide additional information; take the opportunity and be specific.
Table 2 provides a few simple improvements to the agency process that are likely to result in a more efficient and effective approach to procurement requests
In a short article it is not possible to cover too many of the details for providing best practice. However, I have highlighted some areas that can be addressed relatively easily. Some may seem obvious, though they are often poorly addressed. Overall, the procurement team should be specific and ask questions based on a thorough understanding of what it requires and how the potential suppliers might provide it. They should refine questions throughout, demand the detail needed from the suppliers and have detailed checklists.
The agency team, meanwhile, should avoid unhelpful generalities, prepare detailed questions, develop its own checklist of information required from the client, plus ask for confirmation that its approach is correct. It should be specific and proud of its achievements and, above all, be honest about capabilities, define what it is great at and be specific about why this is the case.
If the above advice is followed, the process will be more informative and lead to better decision making and a more accurate choice of suppliers. Surely that is a win-win for everyone involved.
About the author:
Chris Stevenson is an experienced facilitator in healthcare communications. With significant experience with both clients and agencies he provides facilitation and independent advice on the procurement of services to the pharmaceutical and healthcare communications businesses. In addition Chris provides advisory board design and facilitation services to a number of major pharmaceutical organisations. He also provides strategic advice to healthcare communications organisations on strategy, especially growth strategy. He can be contacted at firstname.lastname@example.org
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