Hospital Purchasing: Value Analysis Committees

Since its inception nearly twenty years ago, MedSpan Research has developed extensive experience with the purchasing process at US hospitals.   Although purchasing processes vary by hospital, there are some common themes across the majority of hospitals regarding their purchasing.

In the past, getting physician support could be enough to get your product purchased.  However, with an increased focus on cost savings including reduced product costs in general as well as products that help reduce length of stay and reduced readmission rates, other members of the hospital have an increased responsibility in purchasing decisions.  As a result, various perspectives should be considered when selling a product to a hospital.

At many large hospitals, once there is interest in a new product, it is required to go through a value analysis committee (VAC) for review.  The exact composition of the VAC varies, but typically includes:

 

During the VAC review, a variety of product attributes are examined, including:

• Product cost: upfront cost and the total cost of ownership (such as cost of maintenance, disposables, etc.)
• Potential for cost savings: reduction of procedure cost, reduced length of admission, reduced readmission rates, reduced infection rates
• Quality: ability to achieve desired outcomes, improvement in outcomes compared to other products

The VAC then makes a decision whether to purchase, trial, or reject a product.

Each member of the VAC may place a different level of importance on each attribute and bring a different perception to the table.   Therefore, it is important for a manufacturer of a hospital-based product to take into account how their product can appeal to each of the VAC members.  Manufacturers could consider reviewing their sales strategy and potentially adjust it to target the various members of the VAC in order to better position their product for acceptance in the hospital.

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