Fredo Schotanus

Choosing an organisational form: the case of collaborative procurement initiatives

This paper deals with different organisational forms of collaborative procurement and provides insight into when to use which form. Different forms from the literature are compared with empirical examples to give an overview of forms, which are then described in terms of strategy, skills and organisation. Whilst acknowledging variations, the paper distinguishes between two main forms: virtual networks and third-party organisations. Using empirical data and four theoretical perspectives (transaction cost economics, resource-based view, contingency theory, agency theory), the paper reflects on when which form can be used and presents an overall framework to help choose an organisational form.

Unfair allocation of gains under the Equal Price allocation method in purchasing groups

Certain purchasing groups do not flourish. A supposed reason for this is a creeping dissatisfaction among various members of a group with the allocation of the cooperative gains. In this paper, we analyze unfairness resulting from using the commonly used Equal Price (EP) method for allocating gains under the assumption of continuous quantity discounts. We demonstrate that this unfairness is caused by neglecting a particular component of the added value of individual group members. Next, we develop two fairness ratios and tie these to fairness properties from cooperative game theory. The ratios show among other things that being too-big a player in a purchasing group can lead to decreasing gains. They can be used to assess if EP is an unfair method in specific situations. Finally, we discuss measures a purchasing group could consider in order to attenuate perceived unfairness. Thereby, the group may improve its stability and prosperity.

Striving for integrated services, a Dutch experience

Purpose – In an urban environment in The Netherlands, a municipality, a health insurance company and nine health care organisations try to integrate health care services and social services by means of a global, population-based budget for three areas with above the average costs. Against a background of changing circumstances and bureaucratic impediments, they try to reach an agreement on the contractual provisions before starting cooperation in everyday practice. The purpose of this paper is to describe and evaluate the cooperative process. Design/methodology/approach – The paper reflects the authors’ personal experiences and interpretation of the cooperative process. Findings – The participants experience was that the ideals they had started with faded when financial and juridical procedures dominated the discussions. In contrast with that, focusing on the population involved created positive energy and motivation. Practical implications – Uncertainties are part of social innovation and therefore, formal contracts will be incomplete. Trust building techniques and creating common values and culture are necessary ingredients for developing confidence that the cooperating parties will be able to cope with unforeseen developments or outcomes. Originality/value – The paper may contribute to the successful development of innovative agreements between purchasers and providers of health care and social care in order to achieve better integrated services without rising costs.

Explaining regional variation in home care use by demand and supply variables

In the Netherlands, home care services like district nursing and personal assistance are provided by private service provider organizations and covered by private health insurance companies which bear legal responsibility for purchasing these services. To improve value for money, their procurement increasingly replaces fee-for-service payments with population based budgets. Setting appropriate population budgets requires adaptation to the legitimate needs of the population, whereas historical costs are likely to be influenced by supply factors as well, not all of which are necessarily legitimate. Our purpose is to explain home care costs in terms of demand and supply factors. This allows for adjusting historical cost patterns when setting population based budgets. Using expenses claims of 60 Dutch municipalities, we analyze eight demand variables and five supply variables with a multiple regression model to explain variance in the number of clients per inhabitant, costs per client and costs per inhabitant. Our models explain 69% of variation in the number of clients per inhabitant, 28% of costs per client and 56% of costs per inhabitant using demand factors. Moreover, we find that supply factors explain an additional 17-23% of variation. Predictors of higher utilization are home care organizations that are integrated with intramural nursing homes, higher competition levels among home care organizations and the availability of complementary services.