Measuring Purchasing Groups Performance in the Health Care sector

• DOI: http://doi.org/10.1002/cjas.1519
• Author: Martin Beaulieu,Nathalie Fabbe‐Costes,Jean Nollet
• Date: 01 December 2019
• Published date: 01 December 2019

Measuring Purchasing Groups Performance in the

Health Care sector

Jean Nollet*

HEC Montréal

Martin Beaulieu

HEC Montréal

Nathalie Fabbe-Costes

Aix-Marseille Université

Abstract

For many decades, governments in Western countries have

attempted to control health costs. One of the strategies used

is through purchasing groups, since consolidated needs

generate additional savings. Although various aspects of

purchasing groups have been studied, performance

measurement has been neglected; due to the lack of proper

measures, tensions between the purchasing group and its

members can’t be addressed with more objective

information. However, appropriate performance indicators

are considered a prerequisite to successful collaboration.

Using the in-depth case of a Canadian purchasing group

in the health care sector, this article suggests a set of

performance indicators to measure results considering

dimensions of the purchasing process and the interactions

between the purchasing group and its members (who are

also its customers). © 2018 ASAC. Published by John Wiley

& Sons, Ltd.

Keywords: purchasing groups, performance measurement,

purchasing process, health care sector, case study

Résumé

Depuis plusieurs décennies, les pays occidentaux tentent de

contrôler les coûts de leur réseau de santé. Les groupes

d’achats sont l’une des stratégies utilisées pour consolider

les besoins et ainsi générer des économies additionnelles.

Bien que l’on retrouve des recherches traitant de différents

aspects des groupes d’achats, il en existe peu sur la mesure

de la performance de ces groupes, une situation qui peut

alimenter les tensions naturelles entre le groupe et ses

membres, alors que chaque partie manque de données ob-

jectives pour résoudre ces différents. Des mesures de perfor-

mance appropriées seraient un prérequis à une telle

collaboration. À partir d’une étude de cas d’un groupe

d’achats canadien du secteur de la santé, cet article suggère

des indicateurs de performance qui s’attardent

principalement au processus d’approvisionnement et aux in-

teractions entre les deux parties. © 2018 ASAC. Published

by John Wiley & Sons, Ltd.

Mots-clés: groupes d’achat, mesure de la performance,

processus d’approvisionnement, réseau de la santé, étude de

cas

Introduction

Cost control in the health care sector is a major preoccu-

pation (Hadad, Hadad, & Simon-Tuval, 2013). Various sup-

ply strategies could be used to alleviate this issue

(Governance Committee, 1997). In North America, one of

the means used by most health care centres to control costs

is purchasing groups. A purchasing group is a structure act-

ing as a service provider to other organizations. It is mostly

used for bids and contract negotiation (Nollet & Beaulieu,

2005). A purchasing group is a network (Schotanus &

Telgen, 2007) that involves not only suppliers, but other

purchasers as well: as is the case for most services, there is

an interaction between the provider (in this case, the pur-

chasing group) and the customers (the member organizations

for which the group purchases). Three main objectives are

associated to group purchasing: to obtain better prices

through consolidated quantities from member organizations;

to reduce administrative costs by avoiding duplication in

supplier search and in negotiations; to use the group’s

expertise (Meehan, Ludbrook, & Mason, 2016; Schotanus,

Walker, Bakker, & Essig, 2011).

Adding a purchasing group to the usual purchasing

process places an additional stress on inter-organizational

dynamics (Tadepalli, 2011): the relationship between the

members and the purchasing groups does generate tensions

*Please address correspondence to: Jean Nollet, HEC Montréal, 3000

chemin de la Côte-Sainte-Catherine, Montréal (Québec) H3T 2A7. Email:

jean.nollet@hec.ca

Canadian Journal of Administrative Sciences

Revue canadienne des sciences de l’administration

Published online 27 December 2018 in Wiley Online Library (wileyonlinelibrary.com) DOI: 10.1002/CJAS.1519

36: 514–526 (2019)

Can J Adm Sci

© 2018 ASAC. Published by John Wiley & Sons, Ltd. 36(4), 514–526 (2019)514