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Value Based Product Classification

Before we offer any product for sale or purchase on our closed B2B Solutions Platform, we need to know exactly what it is.

For this reason, we have devised our own product classification system, developed over decades of experience and in collaboration with physicians and other medical users.This experience also extends to EU-compliant, manufacturer-neutral tender specifications, which have also survived before European tender tribunals.

As an additional service, we offer our customers the opportunity to evaluate all products according to the Value Based Procurement approach.

It is not only the price that matters: most important is the quality of the product.

Through classification of products alone, 10-15% of purchase costs can be saved. That equates to millions of euros for a medium-sized hospital.

We know from experience that due to 'fake innovation', many products are far too expensive.

The main task of the BIG MedTech sales force is to sell these products, which are not always suitable for the patients.

The best thing: for the doctor to reach the same conclusion and give a product-neutral rating. They can then select a more suitable product, according to their requirements.

All of this can be achieved without any contact with the medical industry. Our data analysis tools do it all

How we proceed: The basis of everything is a well-founded analysis of internal hospital data


There are three main ways to obtain this data:
  • If the respective hospital/CPB has an enterprise resource planning system and orders electronically from the respective supplier, simply ask the system administrator to complete the fields in an Excel spreadsheet relating to each supplier
  • It´s much easier and requires no internal resources if you send the Excel spreadsheet directly to the respective suppliers. Suppliers have this data in their systems on a daily basis, with details of every product in every hospital.
  • We then scan the invoices, which contain all relevant data, using a high speed scanner.

Once we have the original supplier data, we can feed it into our unique product and price database


Our own classification/rating system - which is based on industry technical references, previous public tender specifications, and further development of existing systems - allows for up to 16 + 3 classification levels. Only with this detailed information is it possible to create valid product comparisons and price benchmarks

Example Product: FFP2 mask with 20 classificaiton levels


Example Product: Isolation gown with 11 classification levels


Example Product: Vascular Stents – Drug eluting, balloon-expanding, long-lasting polymer coating, everolimus with 13 classification levels


From pure product classification to tender specifications


The creation of vendor-neutral service specifications poses enormous challenges for purchasing managers.

However, using the product and service requirements/rating systems of the physicians on our database, the job is comparatively easy, thanks to our data classification system.

Using our classification/rating system - which is based on industry technical references, previous public tender specifications, and further development of existing systems – allows us to create vendor neutral descriptions, as a basis for EU-Compliant public tender.

We can then augment these classifications with additional evaluation criteria, based on our discussions with doctors. Doctors evaluate the product with essential and optional evaluation points, resulting in an objective, value-for-money cost-benefit overview. In other words: a value based procurement result, created by doctors.

price

quality points

cost-value-ratio

Supplier 1

140 €

12

90

Supplier 2

130 €

10

86

Supplier 3

245 €

6

59.2

The result: supplier 1 has been awarded 90 points in terms of a cost/value ratio, offering a product at 140€. So, it's not the cheapest product that receives the highest score, but the one with the best cost/value ratio. In this particular case, quality beats price. Although the industry would have preferred to sell the most expensive product offered by Supplier 3 for 245€, it was only awarded 59.2 points for its cost/value ratio.

Example Product: Heart Pacemaker


Different products can be compared across up to 70 features characteristic of pacemakers. The result: the cheapest does not receive the most points, but the product with the best price-value ratio. In this particular case, once again, quality beats price.
Same procedure as for stents: we develop an evaluation map with cardiologists, who then evaluate it with essential and optional evaluation criteria/points. As a result, we get a very objective cost-benefit overview. Another value-oriented procurement result by the cardiologists

price

quality points

cost-value-ratio

Supplier 1

350 €

24

85.4

Supplier 2

280 €

32

91.3

Supplier 3

300 €

28

89.3

Supplier 4

350 €

32

89.1

Supplier 5

200 €

20

90

The result: supplier 2 has been awarded 91.3 points in terms of a cost/value ratio offering a product at 280€. That means the cheapest product does not receive the most points, but instead the one with the best price-value ratio. In this particular case - quality beats price. Although the industry would have preferred to sell the most expensive one offered by Supplier 4 for 350€, this prodict was only awarded 89.1 points for its cost/value ratio.

Example Product: Hip Systems (3/3)


Stem 11 classification levels
Cup 8 classification levels
Inlay 7 classification levels
Head 7 classification levels
1 / 4
2 / 4
3 / 4
4 / 4

Example Product: Knee System (3/3)


Femur 10 classification levels
Tibia 8 classification levels
Insert 10 classification levels
1 / 3
2 / 3
3 / 3

Conclusion: Value Based Procurement at its best

The 6 examples shown provide a basic overview of our classification system and how it works. Our database features information and price data on over 10 million products, thanks to decades of experience with medical procurement projects in European hospitals.

We always start with the creation of vendor-neutral product classifications - 80-90% of this is done automatically by our database.
The pure classification itself is only the starting point for us or the purchaser to initiate contact with the medical users, and have a discussion, as equals, on the same fact-based level.
Based on this, we contact the medical users/physicians in order to discuss which service requirements/product features are crucial in a specific hospital environment.

Our approach is therefore 100% focused on the medical user/physicians.

After their qualitative evaluation, we then evaluate the respective price.

  • The result is Value-Based Procurement in its purest form - and has been for more than 15 years.
  • We have never understood why the Value-Based Procurement approach has become so popular in recent years.
  • For us, it is and has always been a matter of course
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