Practical recommendations for implementation

Based on the main findings and comparison with literature, trade-offs can be illustrated. Considering the trade-offs, three main scenarios are developed, and illustrated in this paragraph. Reasons for implementing, and related difficulties and/or effects are described in every scenario. An overview of the scenarios and corresponding changes per considerations are illustrated in Figure 7.

7.1.1 Scenario 1 ‘non-full service sourcing – purchasing front and back office separately’

For this first scenario the choice is made for non-full service sourcing. In this way Menzis contracts the providers of diagnostics separately for the front and/or back office, so that a difference can be achieved by contracting only a front office party or a back office party. In this way, quality of care might be better assessed and monitored. In addition, a national orientation is possible for a tender on the back office, instead of a regional approach of purchasing diagnostics. In which a preference could be on a big supplier, given the assumption that a big supplier has got more capacity and creates increasing economies of scale. This might result in a specialisation among providers, with preferably one or a few national supplier(s) for the analysis in a laboratory (back office) with whom a partnership relationship is established. By all means, Menzis needs to establish the necessary conditions which have to be fulfilled by the providers who are selected, and make sure they are generally known. The current criteria in terms of quality, volume and price, used for selecting preferred suppliers, can form the basis for this.

Effects of this scenario would be compared with the advantages of bundling volume. So especially focussed on cost and price management. Providers might bundle their capacity and collaborate to fulfil the service of analysis or phlebotomy facilities. By dividing the service of phlebotomy from the back office, possibly collects more insights in the aspect of costs and quality, however might require more time and attention in monitoring the contracted providers. Subsequently this requires a focus on input rather than output, and additionally a price agreement, with preference of a fixed prices set on analysis (back office). This means no change in comparison with the current situation.

Difficulties in this scenario are the rather long transition period and related transition costs, because the final users of diagnostics, the patients, need to be directed to the contracted providers. Finally, a lot of resistance from especially hospitals, according to the results of the interviews, might arise. They were not in favour of this, having already an optimised full-service product. Again, it should be acknowledged that laboratory services can never completely be removed out of the hospital, due to the 24/7 demand on critically ill patients in wards, OR and IC. The primary care diagnostic function can be located in a hospital. It depends per region, who would be the best partner for the analysis and/or the service of phlebotomy, depending on the existing networks (choice between EDC and hospital).

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7.1.2 Scenario 2 ‘full service sourcing – local approach using a delegated sourcing strategy’

As opposed to scenario 1, in this scenario the focus will be on full service sourcing. Hence, nothing changes related to the current situation. However, in this case the option of subcontracting is possible, in which one provider is responsible for the contract, and might collaborate with other providers to cover and facilitate the full service. In this way efficiency is created by simplifying the suppliers base. The choice for the key-supplier could be based on market share, scale of activities or an already local supply cluster that is present. The findings of plotting the phlebotomy facilities in a core work area of Menzis confirms there is room for collaboration among providers and an efficiency benefit.

Important for primary care (and maybe for the choice of a key-supplier as well), as stated by the stakeholders, is that primary care concerns care in which a gatekeeper function takes centre-stage. The function of laboratory services is for the end-user, GP or medical specialist, different but that does not matter for the executing laboratories. The professional level of service for the general practitioner can vary, so a full service provider could be selected for this, but Menzis, as health insurer, should establish which criteria should be used for this.

In addition, in agreement with the key-supplier, corresponding to the area that the provider covers, an output based contract can be established. As a way to stimulate and monitor innovation and prevention. For example, could be based on a population (capitated payment), varying from a hospital with its patients taking centre-stage or a GP, or an integrated contract based on type of disease or treatment. Essential to accomplish this is good and timely consultation with stakeholders on innovation and what is necessary or expedient in primary care. Hence, could be time consuming to implement and asks for availability on sufficient data of current situation.

Advantages in this case are the use of the network that is already present, and that diagnostics can still take place in the place where it is needed. This was marked as important by some of the stakeholders. Hence, this approach can be characterised by a relational-oriented perspective, and focusses on improving the service provided towards customers, and a focus on stimulating prevention. On the other hand, it might be hard and take time to determine what organisation or provider in health care would be most suitable for the role of key-supplier. GPs, according to the interviews, were defined as not that suitable while having already a lot of responsibilities. In addition, it is important to establish as health insurer what defines quality, performing the combination of secondary and primary care diagnostics or a focus on performing mainly primary care and meet the corresponding needs of a GP.

7.1.3 Scenario 3 ‘current situation with focus on improvement’

In a last drafted scenario, the current organisation will be maintained. However, in consultation with stakeholders improvements on the difficulties described in the interviews can be achieved. For example, a better collaboration and consultation on implementation of innovation. Or making a better distinction between the providers by giving (more remarkable) rewards, for example long term contracts, establishing partnerships, or providing more privileges as preferred supplier. In this way, possible improvement of the current organisation can be accomplished, what eventually benefits the patients. Hence, the aim, of both

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Menzis as the providers, to put clients first, can be achieved. In case of disagreement certain conditions can possibly be imposed in a contractual agreement.

Overall the question arising is what would be the optimal scale for a laboratory or front office provider to operate in. And how can further improvement of blood analysis be made possible. The effect of increases in volume, or suggestions for further improvement of the concentration of blood analysis is not answered in this research and therefore could be further explored. Therefore, a cost-benefit analysis should be performed to gain more insights in the current situation, and evaluate the possibilities for scenario 1 and 2 based on all the potential revenue and costs. This lack of information on the current situation can be seen as an obstacle to implement a change in the purchasing strategy.