What does 'Risk Sharing' in healthcare procurement entail?

'Risk Sharing' in healthcare procurement involves a mutual agreement between healthcare providers and suppliers to collaboratively reduce costs and share the financial risks associated with those costs. This approach recognizes that both parties have a vested interest in maintaining quality while managing expenses. By engaging in risk-sharing agreements, providers and suppliers can develop innovative strategies that align their goals, leading to more sustainable partnerships and better resource allocation.

This strategy can involve various mechanisms, such as performance-based pricing, where suppliers are compensated based on the value or outcomes delivered instead of just the products provided. It fosters a culture of collaboration and accountability, encouraging suppliers to invest in cost-saving measures that benefit both sides.

In a healthcare context, this can lead to improved patient outcomes and operational efficiencies. Therefore, the emphasis on a mutual agreement not only helps in negotiating better terms but also builds a more effective supply chain that can adapt to changing circumstances and demands in healthcare.