2023-2024, Block 5 GW4009MV. Healthcare Procurement & Value Chain Management
WEEK 18
Inhoud
Workshop 4: Translate purchasing models to healthcare (30-4-2024) .................................................... 2
Six-stage purchasing maturity model ........................................................................................................ 2
The purchasing wheel ................................................................................................................................ 5
The Kraljic matrix model ............................................................................................................................ 6
Lecture 5. Relational contracting & Course conclusion (3-5-2024) ......................................................... 8
Part 1: Guest lecture: Relational contracts (T. Achterkamp).......................................................................... 8
Behaviour & Economic relations................................................................................................................ 8
Transactional approach.............................................................................................................................. 8
Design of a relational contract................................................................................................................... 9
3 types of relational contract models ........................................................................................................ 9
Transactional contract vs. Relational contract ......................................................................................... 11
Sourcing model and different types of relational contracts .................................................................... 13
Part 2: Course conclusion (Van Raaij) .......................................................................................................... 15
Exam preparation .................................................................................................................................... 19
Literature ......................................................................................................................................................... 20
For workshop 4: ........................................................................................................................................... 20
Van Weele (2010). The 6-stage purchasing maturity/developmental model. → NO EXAM MATERIAL.. 20
For lecture 5:................................................................................................................................................ 22
XV. Dyer & Singh (1998). The Relational view: cooperative strategy and sources of
interorganizational competitive advantage ............................................................................................. 22
Competitive advantages of relational rents/partnerships ................................................................... 22
XVI. Frydlinger et al. (2019). A New Approach to Contracts: how to build better long-term strategic
partnerships ............................................................................................................................................. 26
Vested approach .................................................................................................................................. 26
5-step process to implement the vested methodology: ..................................................................... 27
The 6 guiding principles ................................................................................................................... 27
1
,2023-2024, Block 5 GW4009MV. Healthcare Procurement & Value Chain Management
Workshop 4: Translate purchasing models to healthcare (30-4-2024)
Preparation:
Re-read the Kraljic article and the slides of lecture 1, with a special focus on the Kraljic portfolio model, the
purchasing maturity model, and the purchasing wheel.
Notes during the workshop:
All 3 models were typically designed to describe purchasing FOR care. They were never developed for
purchasing OF care, but we will try to translate them to this type of purchasing.
An insurance company is an example of an organization that purchases OF care. Other examples of
healthcare purchasers: zorgkantoren/regional offices (under the WLZ), municipalities (under the WMO).
Assignment:
• Translate generic purchasing model to the context of purchasing of care.
o What is the purpose of the original model?
o Which parts/terms do not fit with the context of purchasing of care?
o How can we adapt the model such that it achieves its original purpose, but now for the context
of purchasing of care?
→ For the exam: know the original models!!! And be able to translate them with your creativity.
Six-stage purchasing maturity model
Slide 2:
The message of this model: as you become more integrated and complex, you will have more value.
Not every organization has to go through this journey. An organization with a low purchasing ratio is
perfectly fine with a low maturity stage. So the word ‘time’ on the x-axis is a bit out of place.
An organization that is at a low level of maturity, they are typically focused on price. Total cost of ownership
is an in between, it also involves costs related to the product after you bought the product (e.g. costs of
needed parts, repair costs, etc.). High maturity organizations are more focused on customer value
(customer value = costs + outcomes).
2
, 2023-2024, Block 5 GW4009MV. Healthcare Procurement & Value Chain Management
Functional focus: the purchasing department only focuses on purchasing.
Cross-functional focus: I am just one department, realizing that you can create more value by integrating
your purchasing department, by ‘opening your mind’ and start looking at other functions. A big turmoil is
needed to achieve this line of thinking.
Slide 3: Purchasing maturity for purchasing of care
1. Transactional orientation: purchasing is just there to support transactions. Other people decide what to
purchase, they might even decide on the supplier. It is very operational purchasing: you don’t make any
decisions on the top, you just make sure the goods come in.
2. Commercial orientation: you realize that if you get involved a little bit earlier, you can negotiate for
better prices.
3. Purchasing coordination: you realize that different departments are buying the same (sort of) stuff, so if
you start coordinating what is going on in the whole organization you can have more impact. So you
start coordinate all the purchasing that is going on.
4. Internal integration: within my organization I start to realize that marketing is asking me to order stuff,
but if marketing would become a bit smarter by changing the PR methods, then… So I start to think
about other functions.
5. External integration: the most important external stakeholder is the supplier. So upstream integration.
Making the supplier part of the whole process.
6. Value chain integration: this is when the customer comes in. You as a purchaser are already involved
when the organization is thinking about what the next generation of product is for our customer.
Six-stage purchasing maturity model – purchasing OF care:
In purchasing OF care, an insurance company always needs to look at outcomes and effectiveness of a
certain care type. Effectiveness/Cumulative savings → Effectiveness & Efficiency.
An insurance company typically has a really high purchasing ratio, so they will likely be more at the right
side of the model.
Total cost of ownership: an insurance company could look at costs other than the price associated with care
that is purchased. E.g. if we purchase this type of medication or treatment, does this give less or more side-
effects and thus more costs. → Total cost of healthcare service.
External integration: work together with the hospitals and have integrated discussions with them in order to
generate more value in the purchasing process.
-extra step-: work together with non-healthcare organizations. Take the example from lecture 4: work
together with organizations from the social domain.
→ External integration: (1) within the healthcare domain & (2) also in other domains.
Value chain integration: as an insurance company you can organize focus groups with external stakeholders,
but also include patients.
Customer value → Patient value.
_____________________________
Notes of plenary discussion of this model:
3
WEEK 18
Inhoud
Workshop 4: Translate purchasing models to healthcare (30-4-2024) .................................................... 2
Six-stage purchasing maturity model ........................................................................................................ 2
The purchasing wheel ................................................................................................................................ 5
The Kraljic matrix model ............................................................................................................................ 6
Lecture 5. Relational contracting & Course conclusion (3-5-2024) ......................................................... 8
Part 1: Guest lecture: Relational contracts (T. Achterkamp).......................................................................... 8
Behaviour & Economic relations................................................................................................................ 8
Transactional approach.............................................................................................................................. 8
Design of a relational contract................................................................................................................... 9
3 types of relational contract models ........................................................................................................ 9
Transactional contract vs. Relational contract ......................................................................................... 11
Sourcing model and different types of relational contracts .................................................................... 13
Part 2: Course conclusion (Van Raaij) .......................................................................................................... 15
Exam preparation .................................................................................................................................... 19
Literature ......................................................................................................................................................... 20
For workshop 4: ........................................................................................................................................... 20
Van Weele (2010). The 6-stage purchasing maturity/developmental model. → NO EXAM MATERIAL.. 20
For lecture 5:................................................................................................................................................ 22
XV. Dyer & Singh (1998). The Relational view: cooperative strategy and sources of
interorganizational competitive advantage ............................................................................................. 22
Competitive advantages of relational rents/partnerships ................................................................... 22
XVI. Frydlinger et al. (2019). A New Approach to Contracts: how to build better long-term strategic
partnerships ............................................................................................................................................. 26
Vested approach .................................................................................................................................. 26
5-step process to implement the vested methodology: ..................................................................... 27
The 6 guiding principles ................................................................................................................... 27
1
,2023-2024, Block 5 GW4009MV. Healthcare Procurement & Value Chain Management
Workshop 4: Translate purchasing models to healthcare (30-4-2024)
Preparation:
Re-read the Kraljic article and the slides of lecture 1, with a special focus on the Kraljic portfolio model, the
purchasing maturity model, and the purchasing wheel.
Notes during the workshop:
All 3 models were typically designed to describe purchasing FOR care. They were never developed for
purchasing OF care, but we will try to translate them to this type of purchasing.
An insurance company is an example of an organization that purchases OF care. Other examples of
healthcare purchasers: zorgkantoren/regional offices (under the WLZ), municipalities (under the WMO).
Assignment:
• Translate generic purchasing model to the context of purchasing of care.
o What is the purpose of the original model?
o Which parts/terms do not fit with the context of purchasing of care?
o How can we adapt the model such that it achieves its original purpose, but now for the context
of purchasing of care?
→ For the exam: know the original models!!! And be able to translate them with your creativity.
Six-stage purchasing maturity model
Slide 2:
The message of this model: as you become more integrated and complex, you will have more value.
Not every organization has to go through this journey. An organization with a low purchasing ratio is
perfectly fine with a low maturity stage. So the word ‘time’ on the x-axis is a bit out of place.
An organization that is at a low level of maturity, they are typically focused on price. Total cost of ownership
is an in between, it also involves costs related to the product after you bought the product (e.g. costs of
needed parts, repair costs, etc.). High maturity organizations are more focused on customer value
(customer value = costs + outcomes).
2
, 2023-2024, Block 5 GW4009MV. Healthcare Procurement & Value Chain Management
Functional focus: the purchasing department only focuses on purchasing.
Cross-functional focus: I am just one department, realizing that you can create more value by integrating
your purchasing department, by ‘opening your mind’ and start looking at other functions. A big turmoil is
needed to achieve this line of thinking.
Slide 3: Purchasing maturity for purchasing of care
1. Transactional orientation: purchasing is just there to support transactions. Other people decide what to
purchase, they might even decide on the supplier. It is very operational purchasing: you don’t make any
decisions on the top, you just make sure the goods come in.
2. Commercial orientation: you realize that if you get involved a little bit earlier, you can negotiate for
better prices.
3. Purchasing coordination: you realize that different departments are buying the same (sort of) stuff, so if
you start coordinating what is going on in the whole organization you can have more impact. So you
start coordinate all the purchasing that is going on.
4. Internal integration: within my organization I start to realize that marketing is asking me to order stuff,
but if marketing would become a bit smarter by changing the PR methods, then… So I start to think
about other functions.
5. External integration: the most important external stakeholder is the supplier. So upstream integration.
Making the supplier part of the whole process.
6. Value chain integration: this is when the customer comes in. You as a purchaser are already involved
when the organization is thinking about what the next generation of product is for our customer.
Six-stage purchasing maturity model – purchasing OF care:
In purchasing OF care, an insurance company always needs to look at outcomes and effectiveness of a
certain care type. Effectiveness/Cumulative savings → Effectiveness & Efficiency.
An insurance company typically has a really high purchasing ratio, so they will likely be more at the right
side of the model.
Total cost of ownership: an insurance company could look at costs other than the price associated with care
that is purchased. E.g. if we purchase this type of medication or treatment, does this give less or more side-
effects and thus more costs. → Total cost of healthcare service.
External integration: work together with the hospitals and have integrated discussions with them in order to
generate more value in the purchasing process.
-extra step-: work together with non-healthcare organizations. Take the example from lecture 4: work
together with organizations from the social domain.
→ External integration: (1) within the healthcare domain & (2) also in other domains.
Value chain integration: as an insurance company you can organize focus groups with external stakeholders,
but also include patients.
Customer value → Patient value.
_____________________________
Notes of plenary discussion of this model:
3
