A collaborative product commerce approach to value-based health plan purchasing

Purpose - Collaborative product commerce (CPC) techniques are being applied with greater frequency in the health care sector. The purpose of this paper is to explore the potential barriers to their success in influencing cost and quality. Design/methodology/approach - The health care supply chain (SC) is analyzed and five national health initiatives attempting to apply CPC techniques are described. Findings - Five national-level programs designed to improve health care quality and control costs use a variety of CPC techniques to create incentives and/or disincentives to influence suppliers' behavior. Six barriers to success are identified that threaten healthcare CPC initiatives. They include: widespread resistance to change; information system limitations; the Health insurance Portability and Accountability Act (HIPAA); the required time investment; lack of commitment to CPC principles; and the sustainability of the CPC business model. Research implications/limitations - Investigation into the barriers to success is warranted to develop evidence-based solutions to improve effectiveness of CPC approaches in health care. Practical implications - No national health care initiative to date can be described as an unqualified success in terms of its ability to align the SC. Nevertheless, individually, and to some extent collectively, the aforementioned programs are making some headway. Originality/value - This work is one of the first to present information on how collective CPC efforts are taking shape in health care and to describe key national-level projects currently underway in the field. Such information can offer policymakers and employers insight into how CPC techniques might improve effectiveness in health benefit contracting.