Traditionally, when the public administration buys a product, it specifies which product it wants from among those available on the market, trusting that it will satisfy its needs. But what if, instead of asking for a particular product, the administration asked for a solution that has not yet been developed? Is it possible to buy innovation? According to data from the Organization for Economic Co-operation and Development (OECD), public procurement accounts for between 13% and 20% of gross domestic product worldwide. This volume of business empowers public administrations to become local innovation boosters; converting traditional purchasing processes into the procurement of innovative solutions just might be the lever that sets this economic engine in motion. As part of the PARTNERS Program at the ESADEgov Center for Public Governance -led by Program Director Mónica Reig and in collaboration with Researcher Krista Timeus- a case study was developed to analyze the experience of the cardiology service at Hospital de la Santa Creu i Sant Pau in Barcelona. The institution adopted a model of public procurement of innovation for its implantable cardioverter-defibrillator (ICD) service. This innovative experience came in second place at the Silver Economy Awards, an initiative funded by the European Commission that aims to promote projects that have a significant impact on quality of life for the aging population. Until 2014, the hospital called for bids whenever it needed to buy ICDs. The relationship with the company that supplied the devices therefore ended at the time of delivery and did not take advantage, for example, of the huge amount of data that these devices send in real time to the manufacturer's servers. The cardiologists would download these data from the ICD during each patient's periodic appointments. As a result, all patients had to visit the hospital regularly, regardless of whether they had problems or not. Under the new model, the company not only sells the ICDs but also supplies, monitors and maintains the devices remotely Under the new model, the company not only sells the ICDs but also supplies, monitors and maintains the devices remotely for periods of four years. This is a clear example of public-private cooperation. The company collaborates closely with the hospital by sharing all ICD data in real time, thereby allowing hospital professionals to review these data periodically without having to schedule an appointment for the patient if no problem is detected. This system benefits the patient and -by saving resources- also the hospital.In turn, the supplier works closely with hospital professionals to meet patients' needs and can add new ICDs that were not initially included in the contract, thereby accelerating the pace at which the available innovations are introduced. Unlike the previous model, this contract gives the company security, allowing it to introduce innovations and become more competitive. The experience of Hospital de Sant Pau, Medtronic (the company that won the contract) and the Agency for Health Quality and Assessment of Catalonia (the public agency, known as AQuAS, responsible for improving the quality and sustainability of the Catalan public health service) was presented at the International Congress of Public Management (CLAD). Four key factors that contributed to the success of this case were identified: FinancingHospital de Sant Pau's public procurement of innovation project benefited from the STOPandGO Project, part of the European Commission's Horizon2020 program. This support took the form of technical advice on legal, ethical, regulatory and administrative aspects. Public beneficiary leadershipThe hospital's cardiology team, aware of the need to improve their service, took the initiative to launch the innovation process. This "bottom-up" initiative made it possible to define and lead the project in accordance with the needs of the final beneficiary, thereby increasing the chances of success. The "bottom-up" initiative made it possible to define and lead the project in accordance with the needs of the final beneficiary increasing the chances of success Cooperation between public administrationsThe cooperation between Hospital de Sant Pau and AQuAS in the preparation of the STOPandGO project and the implementation of the program were essential to its success. This cooperation made it possible to combine the technical knowledge of the hospital's medical team with the legal and administrative experience of AQuAS. Risk managementUnder the traditional procurement scheme, the hospital had to assume all the risk by buying the ICDs -some of which might have problems- all at once. Under the new scheme, the contractor is responsible for monitoring the devices, which reduces the frequency of failure. Each time there is a problem, a committee meets to analyze it, thereby guaranteeing transparency in all cases.

ESADE

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Could public procurement boost innovation?

05/2018

Traditionally, when the public administration buys a product, it specifies which product it wants from among those available on the market, trusting that it will satisfy its needs. But what if, instead of asking for a particular product, the administration asked for a solution that has not yet been developed? Is it possible to buy innovation? According to data from the Organization for Economic Co-operation and Development (OECD), public procurement accounts for between 13% and 20% of gross domestic product worldwide. This volume of business empowers public administrations to become local innovation boosters; converting traditional purchasing processes into the procurement of innovative solutions just might be the lever that sets this economic engine in motion.


As part of the PARTNERS Program at the ESADEgov Center for Public Governance -led by Program Director Mónica Reig and in collaboration with Researcher Krista Timeus- a case study was developed to analyze the experience of the cardiology service at Hospital de la Santa Creu i Sant Pau in Barcelona. The institution adopted a model of public procurement of innovation for its implantable cardioverter-defibrillator (ICD) service. This innovative experience came in second place at the Silver Economy Awards, an initiative funded by the European Commission that aims to promote projects that have a significant impact on quality of life for the aging population.


Until 2014, the hospital called for bids whenever it needed to buy ICDs. The relationship with the company that supplied the devices therefore ended at the time of delivery and did not take advantage, for example, of the huge amount of data that these devices send in real time to the manufacturer's servers. The cardiologists would download these data from the ICD during each patient's periodic appointments. As a result, all patients had to visit the hospital regularly, regardless of whether they had problems or not.


Under the new model, the company not only sells the ICDs but also supplies, monitors and maintains the devices remotely


Under the new model, the company not only sells the ICDs but also supplies, monitors and maintains the devices remotely for periods of four years. This is a clear example of public-private cooperation. The company collaborates closely with the hospital by sharing all ICD data in real time, thereby allowing hospital professionals to review these data periodically without having to schedule an appointment for the patient if no problem is detected. This system benefits the patient and -by saving resources- also the hospital.


In turn, the supplier works closely with hospital professionals to meet patients' needs and can add new ICDs that were not initially included in the contract, thereby accelerating the pace at which the available innovations are introduced. Unlike the previous model, this contract gives the company security, allowing it to introduce innovations and become more competitive.



The experience of Hospital de Sant Pau, Medtronic (the company that won the contract) and the Agency for Health Quality and Assessment of Catalonia (the public agency, known as AQuAS, responsible for improving the quality and sustainability of the Catalan public health service) was presented at the International Congress of Public Management (CLAD). Four key factors that contributed to the success of this case were identified:


Financing


Hospital de Sant Pau's public procurement of innovation project benefited from the STOPandGO Project, part of the European Commission's Horizon2020 program. This support took the form of technical advice on legal, ethical, regulatory and administrative aspects.


Public beneficiary leadership


The hospital's cardiology team, aware of the need to improve their service, took the initiative to launch the innovation process. This "bottom-up" initiative made it possible to define and lead the project in accordance with the needs of the final beneficiary, thereby increasing the chances of success.

The "bottom-up" initiative made it possible to define and lead the project in accordance with the needs of the final beneficiary increasing the chances of success


Cooperation between public administrations


The cooperation between Hospital de Sant Pau and AQuAS in the preparation of the STOPandGO project and the implementation of the program were essential to its success. This cooperation made it possible to combine the technical knowledge of the hospital's medical team with the legal and administrative experience of AQuAS.


Risk management


Under the traditional procurement scheme, the hospital had to assume all the risk by buying the ICDs -some of which might have problems- all at once. Under the new scheme, the contractor is responsible for monitoring the devices, which reduces the frequency of failure. Each time there is a problem, a committee meets to analyze it, thereby guaranteeing transparency in all cases.
More Knowledge
Estudio PARTNERS Núm. 2, Reflexiones sobre la cooperación público-privada. Monográfico: la cooperación público-privada en el sector salud
Abelaira , Agustí; Arrufat , Miquel; Colet Arean, Neus; Cordón , Maria ; Guillermo , Salvador; Del Castillo Rey, Manuel; Guanyabens , Joan; Maspons Bosch, Ramón; Longo Martínez, Francisco; Mate , Xavier; Ris , Helena; Sunyer i Tacher, Roger; Reig Majoral, Monica; Saz Carranza, Angel; Vallribera Rodríguez, Pere
Barcelona (Spain): ESADE. Instituto de Gobernanza y Dirección Pública (IGDP), 11/2011
222 p.
Estudios PARTNERS; ; nº 2
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