Approaches to procurement in Swedish healthcare: primary, secondary and capital investments

Sweden is a high income country, with a nominal GDP of €444.6 bn and a GDP growth rate of 4% in 2015. It has a GDP per capita of €45,400 and a population of 9.8 m. The Swedish healthcare system spends more than most other nations on healthcare, and also has higher qualitative healthcare standards and higher healthcare indicator rankings to show for it.
Total healthcare expenditure was € 52.9 bn in 2015, equal to 11.9% of their GDP. Of this amount, 84% is provided for by public health expenditure and 16% is private.

Public procurement

The public sector is the greatest procurer of healthcare in Sweden. Public procurement is ruled by the Swedish Public Procurement Act (LOU), derived from the EU Directive 2004/18/EC concerning public procurement.

Its intention is to guarantee that contracting authorities apply public funds in the most efficient and effective manner possible by pursuing competitive deals. It strives to achieve the following in procurement:

  • Mutual recognition
  • Proportionality
  • Equal treatment
  • Non-discrimination
  • Transparency

The Swedish Competition Authority provides the guidelines and regulations for procurement, and supervises the execution of its ruling.

Primary and secondary care procurement

The procurement of products used in hospitals and secondary care is managed by the corresponding county council, often resulting in price or volume discounts. Medicine procured for use in hospitals are also purchased by the county councils.

Municipalities are responsible for primary care procurement. There are some cases of collaboration amongst municipalities, or between municipalities and their county council, or joint deals amongst regions and county councils when procuring for public healthcare supplies.

More complex demands are handled on a smaller scale and by local authorities independently to ensure that specific needs in their secondary and primary care are met.

The procurement process:

  • Each clinic or medical unit forecasts what their care expense will be prior to each fiscal year, or in some cases, every 2-3 years prior to the expected date of supply delivery.
  • There is the option within this forecast to request additional investment for the renewal of medical equipment.
  • Sometimes companies are invited directly to present innovations to the county council (who serve as regional group purchasers for public hospitals).
  • Tenders or direct contacts are made to seek the best deals, balancing cost and quality indicators.

The average length of public procurement healthcare contracts are 4 years, with a possible option of extension.

Decision makers and influencers

  • The budget decision-maker is most commonly the hospital management.
  • Clinicians contribute as key decision-makers in the selection of a manufacturer.
  • Most county councils create procurement units for the procurement of devices including various types of stakeholders from product users, medical personnel to technicians. They will be consulted throughout the period of the procurement process, up to 1-2 years.

Purchasing consumable

Swedish hospitals have introduced an e-purchase system to streamline the procurement of consumables and some other accessories. In each hospital department there will be a responsible with access to e-purchasing to place orders with a centralized county council purchaser.

Publictenders.net  is also used by Swedish county councils to present tenders to supplier parties for consumable healthcare goods.

The idea is that purchasing in larger volumes for several county facilities at once should result in economies of scale. However, counties have so many tasks and charges made to them, that making the actual delivery of goods sometimes ends up being less cost-efficient and effective.

However, is in fact cheaper in some cases if the hospital procures small quantities of consumables directly from the vendor.

Capital investments

Sweden infographicCapital equipment infrastructure adds up to approximately 4% of public expenditure. Capital equipment is purchased by the county councils and is procured in line with the investment strategy guidelines of the given region.

All purchases over €2,000, and with an economic life span of more than 3 years, are considered investments. To purchase such equipment, the purchasing department of the hospital has to be commissioned in writing. This department will then compose a workgroup and a project plan, write a tender, weigh the offers, and select the supplier.

The tender will be sent to the national Tender Journal and to all companies identified and assessed as potential suppliers during the market analysis. Planned investments of over €200,000 are also announced in the European Union’s Official Journal.

There are also initiatives under development in some county council’s clinical facilities to use an internal web application to manage capital equipment investments. This would facilitate an overview of capital investments and allow the end-user to track delivery.

As part of the workgroup for capital equipment procurement, the Clinical Engineering Department evaluates and inspects the practical logistics, compliance, and functionality of large medical equipment. They also call on third party consultants to help the installation and control of mobile capital equipment such as MRIs.

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