Quality Losses as the Key Argument in the Public Procurement in Healthcare

Abstract

The amount of public procurement spending is growing globally and about one-third of public-sector spending is related to hospitals and healthcare institutions. Knowing that facts, it is a wise decision to strengthen the capacity and capabilities of purchasing public organizations to manage public procurements. Translating needs of public authorities, as well as final users of goods and services, into tender documentation is a complex task which needs multidisciplinary teams. One of the key problems in a public procurement is related to defining specific requirements for companies (bidders), award criteria and technical specification of quality of goods and services. Many purchasing public organizations consider public procurement processes as finished immediately after purchasing and forgot processes of quality surveillance. Dominant practice-public procurement with only one or dominant award criterion based on the lowest price might have as a result purchasing of low-quality goods and services. To prevent that, the purchasing organizations need to apply criteria in addition to or other than price and to describe the functions of the product or the desired outcomes rather than technical specifications. This paper has the aim to present usage of Quadratic Quality Loss Function (QQLF) for the analysis of quality of medical devices for the purpose of public procurement. The application of the QQLF concept can help public purchasing organizations to develop their ability to adequately address problems of quality in use and achieve values for the price. The average or expected quality losses which can be calculated by QQLF are a valuable argument in preventing lower quality products to be repurchased and can be added to other award criteria.