3 mins

Driving and scaling-up innovation in cross-border digital healthcare from the demand side

Martin Gauk
 Angela Emidio

The ESPON Thematic Paper "Working together to deliver better digital healthcare" addresses several areas where territorial cooperation has become an increasingly important consideration, among them, in the also field of public procurement.

According to the Statistical Office of the European Union (Eurostat, 2020), healthcare expenditure amounted to 10 % of gross domestic product in the EU in 2018. A significant portion of the healthcare sector's expenditure is used for procuring eHealth services and products; therefore, it plays an important role in shaping the relevant supply and demand market. If some of this purchasing power is combined through partnerships across borders and used strategically to procure innovative solutions, the healthcare sector can invert the current tendency of the specifications for digital-oriented solutions to be dictated only by the large players in the private sector, and can put itself in the driving seat of digital innovation.

Hence, to successfully engage in procuring innovative digital solutions, healthcare providers must make use of networking and cooperation. Healthcare providers are natural candidates for jointly procuring digital innovation, not only because they currently face common needs, but also because they can pool expertise and the necessary purchasing power to facilitate procurement, and attract innovators, in particular high-tech start-ups and innovative SMEs. In addition, joint and collective procurement arrangements introduce clear benefits, as they bring about economies of scale. This enables digital innovation to have a bigger impact, as it can be deployed by several procurers, thus also ensuring increased interoperability and reducing administrative costs.

To procure digital solutions, healthcare providers should determine whether these solutions already exist on the market or innovation is necessary. By using the modernised EU public procurement directive (Directive 2014/24/EU), for example, healthcare providers can make optimal use of collective purchasing arrangements to respond to unmet needs, creating greater benefits for patients regardless of where they live and improving the public service experience beyond merely satisfying primary needs.

"to successfully engage in procuring innovat ive digital solut ions, healthcare providers must make use of net working and cooperat ion."

Healthcare providers must increasingly consider 'how to buy', as opposed to 'what to buy'. This opens up the discussion about whether or not the procurement of a digital innovation will lead to higher quality and efficiency and deliver the expected eHealth solution or service as well as wider social benefits as set out in the relevant policies.

The EU's research and innovation programmes - 7th Framework Programme, the Competitiveness and Innovation Framework and Horizon 2020 - have been supporting this type of networking and territorial cooperation by funding projects in which groups of procurers from different countries around Europe are jointly implementing pre-commercial procurement (PCP) or public procurement of innovative solutions (PPI), and coordination and networking projects that prepare the ground for future PCP or PPI.

Healthcare providers are natural candidates for jointly procuring digital innovation. This is exemplified by the fact that the majority of EU-funded PCP and PPI projects have been related to the health sector, and all of them include an international dimension.

Altogether, the EU has supported 13 joint PCP, 3 PPI and 5 combined PCP and PPI projects on digital healthcare with EUR 61.1 million (total investment of EUR 82.7 million), which have benefited over 200 procurers. Some 38 % of the of the procurers were public bodies (excluding research organisations and higher education establishments), 18 % were university hospitals, 17 % were other research organisations, 16 % were for-profit organisations and 11 % were other types of organisations.

Most active joint PCP and PPI procurers have been organisations located in regions with strong innovation performance in Belgium, Denmark, Finland, Sweden and the United Kingdom, and in regions with moderate or even modest innovation capacity in Italy and Spain. These procurers have managed to implement most projects, absorbed the majority of the available EU funding and established international procurement networks that will hopefully remain effective and grow for years to come (Map 4).

Together with boosting territorial cooperation, these public procurement tools haven proven to enhance the cost efficiency of digital products and services by considering life-cycle costs over the long term and boosting performance. Studies have shown that innovation procurement leads, on average, to cost savings of 20 % on public procurement expenditure (which constitutes about one fifth of gross domestic product in Europe, or around EUR 2.4 trillion a year).

Savings may also occur because of reduced staff requirements resulting from digitalisation, thereby making healthcare providers more resilient and sustainable. They also open a route-to-market for new economic operators (especially SMEs), helping operators to bring products to the market stimulate enterprise growth.

Marting Gauk is Project Expert - Data, Toolbox and IT at the ESPON EGTC

Angela Emidio is Senior Contract Management Specialist  at the European Investment Bank

This article appears in Rural areas: an eye to the future

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