Academic journal article Journal of International Technology and Information Management

Horizontal Collaborative E-Purchasing for Hospitals: IT for Addressing Collaborative Purchasing Impediments

Academic journal article Journal of International Technology and Information Management

Horizontal Collaborative E-Purchasing for Hospitals: IT for Addressing Collaborative Purchasing Impediments

Article excerpt

INTRODUCTION

Dutch hospitals are currently confronted with rising healthcare costs, an aging population, and increased pressure to cut expenses. These looming challenges are a popular topic of discussion, which is reflected in the considerable media and academic attention given to the phenomenon of mounting healthcare expenditures and the associated ongoing professionalization of the procurement function (Llewellyn, Eden & Lay, 1999; Puschmann & Alt, 2005). To illustrate, healthcare costs per capita in the Netherlands, have already increased 21.7 percent just over the last four years; the Dutch Ministry of Health, Welfare and Sport (VWS) has calculated that the costs will continue to grow in the years leading up to the aging peak of the 'baby boomer' generation in 2040 (VWS, 2008). Anticipated cost increases combined with the knowledge that a hospital's strategy should be based on maximizing the quality of care against cost efficiency (Porter & Olmsted, 2006) puts more and more pressure on the procurement function of a hospital. Horizontal collaborative purchasing, with its many purported benefits, has often been cited as a way for hospitals to address these challenges. However, Dutch hospitals seem not to utilize horizontal collaborative purchasing on any large scale, and recent initiatives have had mixed results.

Within the scientific literature procurement has received increasing attention in the last decades. Various authors (Beall, Carter, Carter, Germer, Hendrick, Jap & Kaufmann, 2003; Ellram and Carr, 1994; Morlacchi & Harland, 2000; Chadwick & Rajagopal, (1995); Spekman, Kamauff, & Salmond, 1994) have contributed to the field of electronic procurement and auctions, with a special emphasis on benefits and structure. A relatively new area of study examines the potential for group buying (collaborative purchasing) to contribute to the purchasing function. Collaborative purchasing refers to the act of multiple firms cooperatively procuring products and services from a supplier, often as a consortium.

Cooperation in itself within the procurement domain is not a new phenomenon; on the contrary researchers were already investigating collaborative purchasing decades ago. However, until recently the focus was mainly on the field of vertical relationships between buyer and supplier (Patterson, Forker, & Hanna, 1999) and on price reductions and improvement of the activities executed within the purchasing department (Ribbers, 1980). Beginning in the 1980's the research agenda has shifted to a more strategic, long-term view with a focus on the purchasing function as a cross-functional chain of purchasing activities (Hahn, & Kaufmann, 1999). Since then many researchers have studied the increased strategic importance of the purchasing function and the corresponding shift from the department purchasing view towards a more integrated and strategic function view (Rozemeijer, 2000).

While vertical buyer-seller cooperation has long been researched, horizontal buyer-buyer cooperation is a more recent development (Ellram, 1991; Essig, 2000; Nollet, & Beaulieu, 2005). This mirrors a shift in practice, with collaborative purchasing increasingly being examined and adopted. At the beginning of the twenty first century, several large automotive and aerospace companies initiated collaborative purchasing platforms like Covisint (www.covisint.com) and Exostar (www.exostar.com), and these platforms continue to extend their services. Here in the Netherlands, one notable case of a successful collaborative purchasing initiative involved four Dutch University Medical Centers (UMC's) that made the decision to buy all their telecommunication costs collaboratively (10,1 million phone calls, 28,6 million minutes per year). They hired the consultancy firm Negometrix to advise their purchasing departments on how to select, structure and execute the project, relying on their expertise in reverse auctioning and procurement solutions. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.