Proposals in Healthcare

Mastering solicitation of bids and proposals is a critical skill required of procurement
officials, and factors such as the quality and financial requirements of the products or services
play a key role in the competitive negotiation process. Some of the most commonly used
solicitation approaches in the healthcare industry is the Request for Proposal (RFP)
document, whereby organizations aim to establish a list bids from potential suppliers. The
article of interest for this assignment is Miller et al. How Procurement Judges the Value of
Medical Technologies: A Review of Healthcare Tenders, which discusses the role of
procurement in decision making in healthcare. Approximately 31% of total hospital
expenditure in the U.S. goes to procurement of medical technologies, necessitating an
evaluation of the approaches employed by healthcare organizations in relation to health
technology assessment. According to the authors, there is a growing trend in procurement in
the healthcare industry wherein solicitation processes are managed by Group Purchasing
Organizations (GPOs) rather than the specific healthcare centers. Therefore, the authors
evaluate several tender documents, specifically RFPs, where aspects such as company
reputation, product quality and service are the primary determining factors beyond price. The
outcomes of the study suggest that the quality criteria is commonly used across different
RFPs in healthcare, and those weighting more on lowest price were rare.
The main topic area of Miller et al. (2019) is the solicitation process for medical
technologies tenders for healthcare delivery in Canada. According to the authors, there is
growing criticism around the criteria used in the healthcare industry to select vendors for
medical technologies, especially considering the crucial nature of patient care solutions. In
this case, the authors evaluate various RFP tenders to establish the impact of using GPOs as
buyers and the evaluation criteria applied, and the contract terms for winning bids in publicly

Acquisition Management Point of View: Miller et al. (2019) 3
funded health systems. In most cases, publicly funded health systems have to oblige by
specific regulations on requirements for bids and proposals, especially due to cost reduction
mandates over the past few years. Therefore, the bid selection process is subjected to
extremely formalized processes for obtaining and evaluating bids resulting in successful
contracts with the right vendors.
Miller et. al provide a valuable insight into the processing of solicitation of bids and
proposals in Canada’s healthcare industry. The authors evaluate RFPs and in their assessment
include criteria similar to what has been discussed in the textbook. For instance, the authors
state that an RFP gives organizations a framework that they can employ to compare different
proposed services or solutions, and to further evaluate proposals to identify the most qualified
vendor (Miller et al., 2019) . In the article, the authors elaborate how GPOs and individual
healthcare organizations apply distinct frameworks to select vendors with the most favorable
terms, especially regarding quality and experience. Contrary to public opinion, suppliers with
the lowest-priced bids are not the majority of winners. Although innovative approaches aim
to reduce the time it takes to source for solutions and services, following a set of protocols
that are state governed helps healthcare delivery centers to stay aligned with current industry
practices.
Typically, an RFP comprises of introduction, requirements, and attachments sections.
The requirements section is a crucial element of an RFP as it shows all the important details
of the products or services to be performed, including factors such as quality requirements,
the frequency of services, and all other deliverables that are pertinent to the product or service
to be procured. As a procurement official, it is necessary to understand the importance of
establishing criterial in a sequential format for suppliers to easily respond. In this regard,
Miller et al. go into detail about what majority of RFPs requirements comprise. According to
their findings, all the reviewed RFPs consisted of two main approaches, one where the

Acquisition Management Point of View: Miller et al. (2019) 4
product criteria and the vendor criteria were included in the evaluation and other criteria
which covered the financial aspects of fulfillment such as contract signing and the total cost
and value add-ons. In addition, the article also demonstrates that about 97.9% of buyers
include their intention to award multiple or single suppliers, although in more that half the
cases the buyers selected the winners at their discretion.
By presenting the dynamics of procurement in Canada’s healthcare industry, this article
presents a positive outlook on the dynamics of using GPOs to pool purchases across different
healthcare organizations. In this case, cost is not a determining factor, although the aim for
using GPOs is to reduce cost of procuring services and products for patient care. While
decision making in procurement has to consider clinical requirements, innovation
opportunities, and cost reduction strategies. In most RFPs, a previous found that the emphasis
on quality criteria was more dominant in evaluative rubrics, even where lowest cost played a
key role in selecting the winning bidder (Bauccio-Teschlog et al., 2020). Therefore, this
article reinforces concepts in Lesson 3 whereby emphasis on “lowest cost” is not a primary
determining factor for all tenders. I agree with this outlook that solicitation of bids and
proposals involves the overall total costs, which includes a balance of quality and financial
criteria. However, it is to be expected that most decision-making processes following a
bidding event do not allow for innovative products, and only a small percentage of companies
in the clinical setting use value-addons or solely quality criteria.

Acquisition Management Point of View: Miller et al. (2019) 5

References

Bauccio-Teschlog, T., Carney, D., Foster, J. D., King, R., & Weber, C. (2020). Developing
and Managing Requests for Proposals in the Public Sector. Routledge.
Miller, F. A., Lehoux, P., Peacock, S., Rac, V. E., Neukomm, J., Barg, C., Bytautas, J. P., &
Krahn, M. (2019). How Procurement Judges the Value of Medical Technologies: A
Review of Healthcare Tenders. International Journal of Technology Assessment in
Health Care, 35(1), 50–55. https://doi.org/10.1017/S0266462318003756