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Title: Cooperative purchasing in healthcare. Results of a survey study among purchasing professionals
Authors: Jonge de, JH
Keywords: Cooperative purchasing
horizontal purchasing
purchasing groups
interfirm relationships
quantitative research
Issue Date: 17-Dec-2014
Publisher: Open Universiteit Nederland
Abstract: Procurement is considered to be a promising area for lowering the costs in the health care sector. Estimates of savings on purchasing prices are 10 to 15% (Nollet & Beaulieu, 2005). In addition, there may be up to more than 40% cost savings on the administrative purchasing costs (Schneller, 2000). Cooperative purchasing is a relatively new strategy aimed at reducing costs in healthcare. Purchasing cooperation initiatives frequently fail. Previous studies have tried to explain the failures of purchasing groups. However, these studies report mixed findings and call for further research. Most studies on cooperative purchasing are qualitative and explorative by nature, which limits their generalizability. By contrast, the present study is set up as a quantitative research aimed at explaining the (lack of) success of cooperative purchasing in healthcare. The problem statement is: How can we explain the success of cooperative purchasing in healthcare? The literature review resulted in a theoretical framework that includes six hypotheses, mostly derived from Transaction Cost Economics (TCE). Trust, commitment, group formality, IT systems, communication, and teamwork skills were believed to have a significant impact on the success of cooperative purchasing. The framework includes another set of two hypotheses where a moderating effect of trust and commitment was expected on the relationship between group formality and success. E-mail invitations for a questionnaire were sent to 69 hospitals, active in cooperative purchasing, covering a total of 17 purchasing groups. A total of 88 valid responses were obtained for the statistical analysis, corresponding to an estimated effective response rate of 24%. Based on the results of a factor analysis, the Teamwork skills construct was divided in two sub-constructs: “teamwork skills-ideas” (relating to the capability of a team to form and execute plans and ideas) and “teamwork skills-conflict” (relating to the capability of a team to resolve conflicts). The results of a stepwise regression analysis indicated a significant impact of trust, IT systems, and teamwork skills-conflicts on the success of cooperative purchasing. Congruently with most previous studies, trust appears to be the most important factor explaining success. No former study explicitly researched the effect of IT systems on cooperative purchasing. The results of this study suggest the need for good and effective IT systems for the tactical purchasing process of cooperative purchasing. Apparently, conflict resolution is pivotal for managing a successful purchasing group. This part of teamwork skills was also not addressed before in literature on cooperative purchasing. In cooperative purchasing groups, there are many situations potentially leading to conflicts, such as, for example, the allocation of savings, time, and costs (Schotanus et al., 2010). Self-interest and opportunism will cause conflicts. Quick resolution of conflicts is found to be very important in the present study. The present study has some limitations that could be seen as a point of departure for further research. The sample size was relatively small and only perceptions have been measured. Further research could try to incorporate, for instance, financial data in their analysis. Our study suffered from a number of measurement problems limiting the generalizability and validity of the findings. Future research could try to work with more reliable constructs and attempt to find other explanatory variables and/or other (direct and moderating) effects. Finally, future studies within the healthcare sector could investigate other types of organizations beyond hospitals. It would be interesting to replicate the results of the present study in other parts of the public sector, the private sector, both in the Netherlands and abroad.
Appears in Collections:MSc Management Science

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