Rethinking public-private partnerships in healthcare procurement

SDA Bocconi Insight - Zoom On - by V. Vecchi, N. Cusumano

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The Covid-19 crisis is shining a light on the huge challenge that many countries are facing in procuring indispensable healthcare equipment to combat the virus, such as ventilators and personal protection equipment. The global supply chains for these products were initially interrupted by a halt in production in China, and then inundated by skyrocketing demand from every nation hit by the pandemic. In the midst of this emergency, all national authorities are competing against one another to keep their healthcare systems functioning and to guarantee medical assistance to their citizens.

 

In many countries, long before the outbreak of the pandemic, health budgets were already being squeezed, putting authorities in the difficult position of having to curb costs while avoiding cutting services. In light of this, some health systems have put measures in place for procurement to keep the prices of medical technologies, equipment and pharmaceuticals under control. Leading the way are the national health systems in Italy and the UK, with strong policies for centralizing procurement through the creation of central purchasing bodies both at a national level (such as the NHS Supply Chain in the UK or CONSIP in Italy) and a regional level (here in Italy). Thanks to their purchasing power, these bodies are better prepared to guarantee continuity in the supply chain in case of emergency, a crucial element to ensure the resilience of healthcare services and in turn the community at large.

 

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