Trends and changes in the relationship between quality and price in tenders for healthcare services in the Israeli health system, 2013-2023

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The Mandatory Tenders Law 5752 − 1992 stipulates that before entering into a contract for the supply of a service or product, public authorities and government corporations must undergo a public tender process. We sought to identify and contextualize the trends observed in tenders for healthcare services over the past decade amid increasingly stringent resource constraints. What prevails over what: quality or price? Methods All tenders for services provided by health professionals published by the Ministry of Health and health maintenance organizations between 2013 and 2023 were collected. Each tender was assessed for the quality and price components. Trends in the quality and price percentage were evaluated. Results A total of 224 tenders were analyzed. A statistically significant weak negative correlation was found between the quality percentage and years (r=-0.185, p < 0.01), indicating that quality percentages tended to decrease over the years. The quality percentages statistically significantly decreased by 10.14 percentage points during the COVID-19 period (p < 0.05). The median quality percentage of tenders for health services directly impacting patients over extended periods was statistically significant higher compared with the median quality percentage of tenders for health services having indirect impacts on patients (p < 0.05). Conclusions Despite healthcare organizations prioritizing quality and seemingly assigning it a higher weight in tenders, price is often the decisive factor. Effective mechanisms to safeguard the quality and safety of healthcare services in addition to incorporating economic considerations into tender processes should be established. Israel healthcare administration tender healthcare services quality price Figures Figure 1 Figure 2 Figure 3 Figure 4 1 Background The 1994 Israeli National Health Insurance Law (NHIL), which came into force in 1995, dictates that all legal residents of the state receive health services according to the principles of justice, equity, and mutual assistance through a legally defined basket of health services (health basket) provided by the country’s four not-for-profit health maintenance organizations (HMOs) or through external service providers. The healthcare system is funded by general taxes as well as a health tax, which is a progressive income tax collected by the National Insurance Institute. These funds are distributed to the HMOs based on a capitation formula [ 1 ]. However, in several defined areas (for example: public health, psychiatry, geriatrics, etc.) the responsibility for funding and delivery remains with the Ministry of Health, either by itself or through an external service provider. The NHIL reorganized the structure of the healthcare system, including the relationship framework and accounting arrangements between the state, the HMOs and various service providers, such as hospitals, health institutes and pharmacies. Similar to public systems in Israel and globally, the healthcare system faces constraints in both financial and professional resources. These challenges are compounded by an ongoing budget crisis, with an annual increase of approximately 2%. Furthermore, the system must contend with a growing population of older adults, with a projected 50% rise among those aged 65 and older. Technological advancements and demographic shifts also contribute to the complexities faced by the healthcare system. 1.1 Obligation of tenders - goals and principles HMOs and health corporations provide a wide range of health services through external service providers via outsourcing and/or by operating human resources services. This accepted practice - both in Israel and in all Organization for Economic Cooperation and Development (OECD) countries - is ingrained and organized within the regular operations of government ministries and public bodies, including the Ministry of Health. In many cases, the advantages of engaging private service providers outweigh the disadvantages due to the structure of the health system and its unique characteristics. For example, it is impractical to oblige a HMO, which is legislatively mandated to provide its insured members with a wide and diverse basket of accessories and services (ranging from insoles to shoes, through medical equipment to home hospitalization or ambulance transport services) to handle all these tasks internally rather than purchasing them from external suppliers. This is provided that there exists a comprehensive and effective system for controlling, supervising, and enforcing standards of quality, safety, and service. Typically, the most appropriate and efficient method for selecting a service provider is through the requirement for health organizations to conduct competitive tenders. According to Section 2 of the Mandatory Tenders Law 5752 − 1992 [ 2 ] before entering into a contract for the supply of a service or product, public authorities (in this case, the Ministry of Health) and government corporations, including HMOs, must undergo a public tender process. The law and regulations specify the obligations, conditions, rules, and limitations that mandate the Ministry of Health and HMOs to comply with tender requirements. The mandatory tender procedure ensures that national, public and economic interests are preserved, while achieving both equity and economic efficiency. However, in cases where there is a tension between achieving economic efficiency and realizing the principle of equity, the latter should be preferred [ 3 ]. For example, the obligation to publish a 'call for proposals' aims to both inform the public and invite potential suppliers to submit proposals (Mandatory Tenders Law 5752 − 1992, Sections 1 and 15 [ 2 ]). The stipulations outlined in the law and regulations prioritize the principle of equity in future contractual engagements, while explicitly reflecting the values inherent in ensuring proper management, including transparency, fairness, and integrity. However, recognizing unique circumstances, the law and regulations establish conditions under which exemptions from tender obligations may be granted (Mandatory Tenders Law, 5752 − 1992, Section 3 and 4 [ 2 ]; The Mandatory Tenders Regulations, 5753 − 1993, Section 3 [ 4 ]). Similar to other public tenders, healthcare system tenders are governed by two sets of legal regulations: public law and contract law. Consequently, in cases where there are allegations of deficiencies in the tender wording, preparation stages, or selection process, the aggrieved party retains the right to appeal to the tender committee and pursue further escalation through administrative channels. 1.2 Types and classifications of tenders There are four main types of tenders in the Israeli health system: A. 'Public tender': refers to a process wherein a government corporation or health fund publicly announces, both on their website and in the media, an invitation for interested parties to submit proposals for a particular contract. This invitation is open to the public and companies that are pertinent to the provision of the specified service. Typically, the tender process involves at least three stages: initial publication of the tender, review of bids, and a period for questions and answers. Subsequently, proposals are submitted, followed by potential interviews with proposers, necessary hearings, and finally, the announcement of the selected proposal. B. 'Frame tender': for this type of tender, a 'closed list of suppliers' is initially compiled, followed by a subsequent public competitive procedure where one or more suppliers are chosen from this pre-established list. In such tendering processes, the threshold and quality evaluation phase occur when the initial list of suppliers is compiled. Subsequently, these selected suppliers compete among themselves to provide the services or goods outlined in the framework tender. This approach allows for a relatively expedited process in selecting service providers. Primarily implemented in the healthcare system during the COVID-19 pandemic, it facilitated rapid responses to evolving needs such as establishing COVID-19 testing facilities and distributing vaccines to specific populations. C. ‘Call for tenders’ - a streamlined tender process that can be used to gather initial information and ultimately to set up a timed contract. It is usually used to establish new activities in a pilot configuration for a period of up to one year. D. ‘Exemption from tendering’ - certain circumstances permit contracting with service providers without undergoing a public tender process. For example, contracts with a financial scope below the threshold set by law for tender execution; urgent projects; the existence of a single provider or expert within Israel; contracts for specialized professional services necessitating specific knowledge, expertise, or trust relationships; engagements with the government or government corporations; joint ventures and partnerships with non-profit organizations. In addition, whether it pertains to a public tender or a framework tender within the healthcare system, an additional sub-category of tenders exists: A. Price tender where the competition is focused on achieving the lowest costs; B. Quality tender where the competition is aimed at delivering superior service quality; C. Combined tender, which strikes a balance between price and quality (where the proportion between the two components may vary, such as 60% price and 40% quality, or vice versa). From a formal standpoint, most healthcare system tenders combine price and quality considerations. Here, we sought to identify, reflect, and contextualize the processes and trends observed in tenders for healthcare services over the past decade amid increasingly stringent resource constraints. We also addressed the significance of economic considerations in tenders for healthcare providers. 2 Methods 2.1 Setting In July 2023, requests for information on all tenders for services provided by health professionals between 2013 and 2023 were submitted under the Freedom of Information Law to the Ministry of Health, and to the four HMOs (Clalit Health Services, Maccabi Healthcare Services, Meuhedet, and Leumit Health Care Services). The health services included in the requests were home care, home hospitalization, home hospice, home rehabilitation, laboratory services, geriatric services, psychological services, professional training, and ambulatory services. At the same time, information on public tenders in the healthcare sector were identified and cataloged using the 'Yifat Tenders' system and the Accountant General's Government Procurement Administration website. 2.2 Data collection Data collection took place between July and November 2023, yielding a total of 224 tenders for analysis. Each tender was assessed for the quality and price components of the proposals. The proportions of 'quality' and 'price' were based on the score mix defined as the criteria for winning the tender in the tender documents; i.e., the relative weight assigned to the quality of the submitted proposal (expressed as X% quality out of a score of 100% required for winning) and the relative weight assigned to the price quote (expressed as Y% price out of a score of 100% required for winning). 2.3 Statistical Analysis All statistical analyses were conducted using Excel or R software under the supervision of an external statistician. Categorical variables were summarized using number and frequencies (%). The continuous variables were determined by Shapiro test as non-normally distributed; therefore, they were described as median and interquartile range (IQR). A correlation coefficient was computed to assess the relationship strength between the tender year and quality percentage defined in the tender, in order to examine trends over the analysis years. One way analysis of variance (ANOVA) was conducted to compare the average quality percentages across different periods, including the COVID-19 pandemic period and its preceding and subsequent years. Statistical significance was considered for p values less than 0.05. 3 Results A total of 224 tenders were collected for the analysis period 2013–2023 Notably, despite the legal obligation for conducting tenders, the number of tenders conducted by the four HMOs over the years was relatively small (only 35 tenders). Most engagements between HMOs and service providers occurred through one of the exemptions from tendering, predominantly utilizing the 'single provider' approach. Between 2013 and 2018 the median quality percentage in provider contracts ranged from 0.6 to 0.7 (Table 1 and Fig. 1 ), whereas the median price percentages (which are complementary to the quality percentage) ranged from 0.3 to 0.4. From 2018, the median quality percentage declined: in 2019, the median quality percentage decreased by about 33% and was 0.35 to 0.4 in 2020 and 2021, respectively. In 2022 and 2023, the median quality percentages increased to 0.6 and 0.5, respectively (Fig. 2 ). Over the years, it is evident that the frequency of the quality value among the tenders is 0 and 0.6compared to 0.4 and 1 in the price value (they also appear 48 times over the years) (Fig. 3 ). Table 1 Median quality percentage and interquartile range by year in tenders for services provided by health professionals Year Number of tenders Quality percentage Median (IQR) 2013 8 0.7 (0.575, 0.7) 2014 15 0.6 (0.425, 1) 2015 10 0.7 (0.387, 0.925) 2016 21 0.6 (0, 0.7) 2017 27 0.6 (0.4125, 0.7) 2018 29 0.6 (0.15, 0.6) 2019 16 0.4 (0.2, 0.6) 2020 20 0.35 (0, 0.45) 2021 20 0.4 (0, 0.6) 2022 30 0.6 (0.462, 0.6) 2023 28 0.5 (0.275, 0.6) A statistically significant weak negative correlation was found between the quality percentage and years (r=-0.185, p < 0.01), indicating that quality percentages tended to decrease over the years. ANOVA, conducted to assess whether there were significant differences in the median quality percentages during the COVID-19 pandemic (defined for this study as January 30, 2020, to January 30, 2023), showed a statistically significant effect of this period on the quality percentage variable (F[1, 219] = 5.47, p < 0.05). Tukey's Honest Significant Difference test, performed to elucidate the direction and magnitude of this effect during the COVID-19 period, showed that, the quality percentages statistically significantly decreased by 10.14 percentage points during this period (p < 0.05). To explore variations among different types of tenders, we compared the quality percentages of tenders for health services directly impacting patients over extended periods (e.g., home care, home hospitalization, student health services) with the quality percentages of tenders for health services having indirect impacts on patients (e.g., instruction and training services, administrative personnel services). The median quality percentage of tenders for health services directly impacting patients over extended periods was statistically significant higher compared with the median quality percentage of tenders for health services having indirect impacts on patients (p < 0.05 by Wilcoxon’s signed ranked test). 4. Discussion In recent years, it seems that economic considerations have increasingly become a central factor in the decision-making processes of healthcare organizations and institutions. Unfortunately, this trend often occurs at the expense of potentially compromising the quality and safety of public health services. This study’s findings suggest a discernible trend over the years wherein greater emphasis is placed on the price component, resulting in situations where service providers offering the lowest cost, rather than the highest quality, are awarded the tender. Despite declarations by healthcare organizations prioritizing quality and assigning it a higher weight in tenders, reality often sees price becoming the decisive factor, even when there is a significant disparity in quality scores favoring higher bids. This is a commonly acknowledged situation within the healthcare system, particularly among clinical professionals, although it may not always be openly acknowledged. It is important to note that price is not inherently negative, and there is certainly merit in considering cost factors. However, when it comes to healthcare services, it is imperative to establish effective safeguards against price becoming the sole determining factor, especially in tenders involving professional personnel such as doctors, nurses, and other healthcare professionals. When price dictates service quality and safety, providers may resort to employing lower-quality personnel to reduce costs. Thus, when a provider offers an exceptionally low price, almost reaching the point of operating at a loss, it typically results in one of two outcomes: either a significant deterioration in the quality of public health services or a gradual escalation in prices over the service period. In either scenario, both the healthcare system and the public suffer adverse consequences. One potential safeguard is to establish a minimum price within tenders to ensure the quality and safety of health services provided to the public. While healthcare organizations may be driven to utilize the price component to mitigate deficits, they must also recognize the broader implications for public health. As the price component assumes greater prominence, particularly in tenders involving professional personnel, there is a greater risk of compromising quality and safety. The results of this study have shown that this phenomenon appears to be more prevalent in more significant tenders, involving professional personnel and services with a direct impact on patients for extended periods. 4.1 Economic efficiency versus equity The study simulates the delicate balance between achieving economic efficiency and realizing the equity principle within the tender procedure, reflecting the classic economic concept of the trade-off between efficiency and equity. Equity is enshrined as one of three fundamental values of Israel’s NHIL [ 5 ]. Policymakers in healthcare are required to to address public health needs and the realization of services when the demand for healthcare services is not saturated. Therefore, decisions regarding the allocation of limited resources must be based on the principles of equity and efficiency. Sometimes these principles conflict with each other: while efficiency seeks to maximize overall population health given resource constraints, equity aims to ensure fair resource distribution and accessibility to healthcare services in order to minimize disparities among population groups [ 6 – 8 ]. The study provides an example where considerations of efficiency and equity may appear at odds in tenders for healthcare services. Furthermore, the study findings underscore the role of tenders in selecting service providers, aligning with the economic principle of market mechanisms for resource allocation. Public tenders serve as a prevalent economic tool for fostering competitive procurement and the efficient allocation of public resources [ 9 ]. 4.2 Regulation and market failures The theory of the free market asserts that crises can be resolved without economic intervention, as its "invisible hand" will optimally allocate resources. A prevalent suggestion often made in discussions surrounding healthcare planning and policy reforms, is that the market should be left alone to efficiently distribute healthcare resources while the government should not be involved. Advocates argue that government laws and regulations in the healthcare services market disrupt the appropriate allocation of resources and lead to inefficiencies. Nevertheless, although a market that meets all conditions for efficient resource allocation is an ideal in economic theory, it is rare in the real world. Markets fail because he necessary conditions for perfect/free markets are rarely met, particularly in the healthcare sector, which is prone to numerous market failures such as limited suppliers, information asymmetry, moral risks, inflexible demand, and manufacturers that do not maximize profits. The legal obligations and regulations governing tender processes can be linked to economic theories concerning market failures. Government intervention through regulations and tenders is often warranted in situations where markets may struggle to achieve optimal outcomes independently. The conclusion underscores the need for implementing effective safeguards against turning price into the deciding factor in tender awards. This is crucial to mitigate economic manipulations by service providers competing in tenders, which may compromise the quality and safety of healthcare services. Moreover, this aligns with the economic concept of externalities, where government intervention may be necessary to address unintended consequences in the market, particularly in the context of public health [ 10 ]. 4.3 Price as a determining factor Evidence-based policy and decision-making in healthcare necessitate considering the benefits of interventions as well as their required resources. Nevertheless, within the realm of public health, many individuals lack an understanding of how interventions should be selected, particularly in the framework of economic evaluations. The utilization of economic health evidence to guide decision-making and resource allocation in healthcare is increasingly pertinent as the global population ages and healthcare resource consumption rises. The limited availability of resources for medical care, make it impractical to implement any health intervention. Resource constraints compel us to continually make choices between alternatives in nearly every situation. Our findings revealed a trend wherein undue emphasis is placed on the price component in tender decisions, potentially jeopardizing the quality or safety of healthcare services. This trend mirrors the economic principle of cost-benefit analysis and underscores the challenges associated with prioritizing cost savings over quality in public service provision [ 11 ]. 4.4 The long-term implications of a cost-centric approach Time plays a crucial role in health economic evaluations, as the timing and duration of clinical events, medical interventions, and their consequences affect estimated costs and effects. The scope of policy questions addressed by health economic analyses may change over time. While some policy decisions may yield only short-term consequences, others may have ramifications years later because their effects may not be immediately apparent or because they impact both current and future groups. Therefore, health economic models must accurately simulate time to provide dependable information on resource allocation. The discussion on the long-term consequences of a price-driven approach to healthcare procurement aligns with economic theories concerning intertemporal decision-making. While short-term cost savings may seem appealing, they can potentially lead to adverse long-term effects on public health [ 12 ]. 4.5 Strengths and limitations The use of various statistical methods for data analysis enables a comprehensive examination of the findings, facilitating the identification of relationships between variables. This study relied on data from official sources, including HMOs and the Ministry of Health, thereby supporting the reliability of the results. The HMOs are responsible for providing most healthcare services to the public - either independently or through external providers. However, in view of the finding that HMOs engage in non-tendered contracting practices, much of the data underlying this research originates from the Ministry of Health. Therefore, if HMOs were to consistently utilize tender procedures for every service provider contract, it could potentially increase the number of tenders and offer a more accurate depiction of the situation. Moreover, in Israel, the COVID-19 pandemic period was also subject to other significant events, such as military conflicts and multiple elections, which complicated the isolation of the pandemic’s specific impact on the quality percentages in tenders. Furthermore, while most tenders prioritize price as a central component, they often include threshold conditions aimed at safeguarding the quality of the supplier or service. However, many of these threshold conditions are minimal and may not effectively ensure quality standards. 5. Conclusions The study findings suggest that over the years economic considerations have become increasingly dominant, and at times even dictate, the decision-making processes within tenders for healthcare services providers, so that the emphasis on quality is diminished. Although the healthcare system often emphasizes the importance of service quality, the selection of service providers appears to be primarily driven by price during the tender process. This phenomenon is particularly noticeable in significant tenders for the direct provision of healthcare services over extended periods, potentially posing challenges to maintaining the quality and safety of public health services. The analyses also indicate a statistically significant impact of the COVID-19 period on median quality percentages, underscoring the influence of emergency events like the pandemic on the quality of healthcare services. The study also highlights the necessity of establishing effective mechanisms to safeguard the quality and safety of healthcare services in addition to incorporating economic considerations into tender processes. Key components of the healthcare system, such as transparency, fairness, and integrity, highlight the necessity of averting price from becoming the determining factor in contracting processes. Instead, they underscore the importance of prioritizing efficiency, quality, and safety in healthcare services. Additional research is necessary to thoroughly understand the effects of prioritizing price in tender processes and to assess its potential implications on healthcare outcomes. Declarations Author Contributions : Funding: This manuscript was not supported by any external funding Conflict of Interest: The authors have no conflicts of interest to declare. Data Availability Statement : The raw data supporting the conclusions of this article will be made available by the authors, without undue reservation. Ethics Approval: Ethics approval was not required as the study did not include humans subjects or animals Informed consent: Not applicable References Clarfield AM, Manor O, Nun GB, Shvarts S, Azzam ZS, Afek A et al. Health and health care in Israel: an introduction. Lancet : 2017, 389(10088):2503 – 13.10.1016/s0140-6736(17)30636-0. Mandatory. Tenders Law 5752 – 1992. In. Appeal an Administrative Agency Decision 5949/07 Amishragaz. - Natural Gas Ltd. v. Paz-Gas Ltd.. 1993. The Mandatory Tenders Regulations. 5753 – 1993. In. Israeli Online Legislation Database. 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Pharmacoeconomics 2015, 33(12):1255 – 68.10.1007/s40273-015-0309-4. Additional Declarations No competing interests reported. Cite Share Download PDF Status: Published Journal Publication published 18 Dec, 2024 Read the published version in BMC Health Services Research → Version 1 posted Editorial decision: Revision requested 31 Jul, 2024 Editor assigned by journal 30 Jul, 2024 Submission checks completed at journal 30 Jul, 2024 First submitted to journal 30 Jul, 2024 You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. 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Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-4826321","acceptedTermsAndConditions":true,"allowDirectSubmit":false,"archivedVersions":[],"articleType":"Research Article","associatedPublications":[],"authors":[{"id":334176130,"identity":"b94a5dd9-9732-4339-9c63-650c56b4e7ab","order_by":0,"name":"Adi Niv-Yagoda","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAAA9ElEQVRIiWNgGAWjYFCCxAaGBAYGOTRRAwuCWox5oEphWiTwaEmAaOxB1cKAWwt/e3Lbg4dth9P3s58xfMzD8Efe4ADzww8MBbi1SJx52G6Q2HY4t4cnx9hwBoOB4YYDbMYSeB12I7FNIuEMUAtDjpnEBwYDxg0HGMzw+kUeqiWdh/+N+Y8EBgP7DQfYv+HVYgDWUnE4gUcix4wBaEvihgM8+G0xPPMQpCXdsOfGs2LJGQbGyTMP8xRLJODRInc8/ZnkDwNrefb+5I2feSrkbPuOt2/88OGPDW7vQ0AzzJ1AzMwAiyy8oI6wklEwCkbBKBi5AAApFU5pv7wrawAAAABJRU5ErkJggg==","orcid":"","institution":"Tel Aviv University","correspondingAuthor":true,"prefix":"","firstName":"Adi","middleName":"","lastName":"Niv-Yagoda","suffix":""},{"id":334176132,"identity":"75ff728d-47a0-4379-bdc2-fbad27d23526","order_by":1,"name":"Hadar Goldshtein","email":"","orcid":"","institution":"Ben-Gurion University of the Negev","correspondingAuthor":false,"prefix":"","firstName":"Hadar","middleName":"","lastName":"Goldshtein","suffix":""}],"badges":[],"createdAt":"2024-07-30 06:59:20","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-4826321/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-4826321/v1","draftVersion":[],"editorialEvents":[{"content":"https://doi.org/10.1186/s12913-024-11963-4","type":"published","date":"2024-12-18T15:58:34+00:00"}],"editorialNote":"","failedWorkflow":false,"files":[{"id":63887967,"identity":"b22a05c7-fefb-467e-a428-dde9eda10fc8","added_by":"auto","created_at":"2024-09-03 11:40:58","extension":"jpg","order_by":1,"title":"Figure 1","display":"","copyAsset":false,"role":"figure","size":38567,"visible":true,"origin":"","legend":"\u003cp\u003e\u003cstrong\u003eMedian quality percentage and interquartile range by year in tenders for services provided by health professionals\u003c/strong\u003e\u003c/p\u003e","description":"","filename":"Picture1.jpg","url":"https://assets-eu.researchsquare.com/files/rs-4826321/v1/a02b958f6e4e8d6e3ebd83e1.jpg"},{"id":63887976,"identity":"e4b6a4b1-faca-4e8e-b4e8-8d55d101d73b","added_by":"auto","created_at":"2024-09-03 11:41:00","extension":"jpg","order_by":2,"title":"Figure 2","display":"","copyAsset":false,"role":"figure","size":164380,"visible":true,"origin":"","legend":"\u003cp\u003e\u003cstrong\u003eMedian quality percentage versus median price percentage by year\u003c/strong\u003e\u003c/p\u003e","description":"","filename":"Picture2.jpg","url":"https://assets-eu.researchsquare.com/files/rs-4826321/v1/f88341aee1d4b070f64f16ae.jpg"},{"id":63887975,"identity":"278ac491-b21c-41c6-b908-4581cf197f1a","added_by":"auto","created_at":"2024-09-03 11:40:59","extension":"jpg","order_by":3,"title":"Figure 3","display":"","copyAsset":false,"role":"figure","size":22843,"visible":true,"origin":"","legend":"\u003cp\u003eLegend not included with this version.\u003c/p\u003e","description":"","filename":"Picture3.jpg","url":"https://assets-eu.researchsquare.com/files/rs-4826321/v1/731e079e9e37e40358190404.jpg"},{"id":63889259,"identity":"85a432bf-c8ef-40fb-88df-0a53506b5c61","added_by":"auto","created_at":"2024-09-03 11:48:58","extension":"jpg","order_by":4,"title":"Figure 4","display":"","copyAsset":false,"role":"figure","size":16959,"visible":true,"origin":"","legend":"\u003cp\u003e\u003cstrong\u003eComparison of the median quality percentages of tenders for health services directly impacting patients over extended periods versus the median quality percentages of tenders for health services having indirect impacts on patients\u003c/strong\u003e. P\u0026lt;0.05 by Wilcoxon’s signed ranked test\u003c/p\u003e","description":"","filename":"Picture4.jpg","url":"https://assets-eu.researchsquare.com/files/rs-4826321/v1/5a609ad8478c1801c6b759c5.jpg"},{"id":72201988,"identity":"465b285e-1302-481e-af05-3bb91193487b","added_by":"auto","created_at":"2024-12-23 16:13:10","extension":"pdf","order_by":0,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":769346,"visible":true,"origin":"","legend":"","description":"","filename":"manuscript.pdf","url":"https://assets-eu.researchsquare.com/files/rs-4826321/v1/abfcc4a0-1fc5-419c-96e4-184a167867d4.pdf"}],"financialInterests":"No competing interests reported.","formattedTitle":"Trends and changes in the relationship between quality and price in tenders for healthcare services in the Israeli health system, 2013-2023","fulltext":[{"header":"1 Background","content":"\u003cp\u003eThe 1994 Israeli National Health Insurance Law (NHIL), which came into force in 1995, dictates that all legal residents of the state receive health services according to the principles of justice, equity, and mutual assistance through a legally defined basket of health services (health basket) provided by the country\u0026rsquo;s four not-for-profit health maintenance organizations (HMOs) or through external service providers. The healthcare system is funded by general taxes as well as a health tax, which is a progressive income tax collected by the National Insurance Institute. These funds are distributed to the HMOs based on a capitation formula [\u003cspan class=\"CitationRef\"\u003e1\u003c/span\u003e]. However, in several defined areas (for example: public health, psychiatry, geriatrics, etc.) the responsibility for funding and delivery remains with the Ministry of Health, either by itself or through an external service provider. The NHIL reorganized the structure of the healthcare system, including the relationship framework and accounting arrangements between the state, the HMOs and various service providers, such as hospitals, health institutes and pharmacies.\u003c/p\u003e\n\u003cp\u003eSimilar to public systems in Israel and globally, the healthcare system faces constraints in both financial and professional resources. These challenges are compounded by an ongoing budget crisis, with an annual increase of approximately 2%. Furthermore, the system must contend with a growing population of older adults, with a projected 50% rise among those aged 65 and older. Technological advancements and demographic shifts also contribute to the complexities faced by the healthcare system.\u003c/p\u003e\n\u003cdiv id=\"Sec2\" class=\"Section2\"\u003e\n \u003ch2\u003e1.1 Obligation of tenders - goals and principles\u003c/h2\u003e\n \u003cp\u003eHMOs and health corporations provide a wide range of health services through external service providers via outsourcing and/or by operating human resources services. This accepted practice - both in Israel and in all Organization for Economic Cooperation and Development (OECD) countries - is ingrained and organized within the regular operations of government ministries and public bodies, including the Ministry of Health. In many cases, the advantages of engaging private service providers outweigh the disadvantages due to the structure of the health system and its unique characteristics. For example, it is impractical to oblige a HMO, which is legislatively mandated to provide its insured members with a wide and diverse basket of accessories and services (ranging from insoles to shoes, through medical equipment to home hospitalization or ambulance transport services) to handle all these tasks internally rather than purchasing them from external suppliers. This is provided that there exists a comprehensive and effective system for controlling, supervising, and enforcing standards of quality, safety, and service. Typically, the most appropriate and efficient method for selecting a service provider is through the requirement for health organizations to conduct competitive tenders.\u003c/p\u003e\n \u003cp\u003eAccording to Section \u003cspan class=\"InternalRef\"\u003e2\u003c/span\u003e of the Mandatory Tenders Law 5752\u0026thinsp;\u0026minus;\u0026thinsp;1992 [\u003cspan class=\"CitationRef\"\u003e2\u003c/span\u003e] before entering into a contract for the supply of a service or product, public authorities (in this case, the Ministry of Health) and government corporations, including HMOs, must undergo a public tender process. The law and regulations specify the obligations, conditions, rules, and limitations that mandate the Ministry of Health and HMOs to comply with tender requirements. The mandatory tender procedure ensures that national, public and economic interests are preserved, while achieving both equity and economic efficiency. However, in cases where there is a tension between achieving economic efficiency and realizing the principle of equity, the latter should be preferred [\u003cspan class=\"CitationRef\"\u003e3\u003c/span\u003e]. For example, the obligation to publish a \u0026apos;call for proposals\u0026apos; aims to both inform the public and invite potential suppliers to submit proposals (Mandatory Tenders Law 5752\u0026thinsp;\u0026minus;\u0026thinsp;1992, Sections \u003cspan class=\"InternalRef\"\u003e1\u003c/span\u003e and 15 [\u003cspan class=\"CitationRef\"\u003e2\u003c/span\u003e]). The stipulations outlined in the law and regulations prioritize the principle of equity in future contractual engagements, while explicitly reflecting the values inherent in ensuring proper management, including transparency, fairness, and integrity. However, recognizing unique circumstances, the law and regulations establish conditions under which exemptions from tender obligations may be granted (Mandatory Tenders Law, 5752\u0026thinsp;\u0026minus;\u0026thinsp;1992, Section \u003cspan class=\"InternalRef\"\u003e3\u003c/span\u003e and \u003cspan class=\"InternalRef\"\u003e4\u003c/span\u003e [\u003cspan class=\"CitationRef\"\u003e2\u003c/span\u003e]; The Mandatory Tenders Regulations, 5753\u0026thinsp;\u0026minus;\u0026thinsp;1993, Section \u003cspan class=\"InternalRef\"\u003e3\u003c/span\u003e [\u003cspan class=\"CitationRef\"\u003e4\u003c/span\u003e]). Similar to other public tenders, healthcare system tenders are governed by two sets of legal regulations: public law and contract law. Consequently, in cases where there are allegations of deficiencies in the tender wording, preparation stages, or selection process, the aggrieved party retains the right to appeal to the tender committee and pursue further escalation through administrative channels.\u003c/p\u003e\n\u003c/div\u003e\n\u003cdiv id=\"Sec3\" class=\"Section2\"\u003e\n \u003ch2\u003e1.2 Types and classifications of tenders\u003c/h2\u003e\n \u003cp\u003eThere are four main types of tenders in the Israeli health system:\u003c/p\u003e\u003cspan\u003e\n \u003cp\u003eA. \u0026apos;Public tender\u0026apos;: refers to a process wherein a government corporation or health fund publicly announces, both on their website and in the media, an invitation for interested parties to submit proposals for a particular contract. This invitation is open to the public and companies that are pertinent to the provision of the specified service. Typically, the tender process involves at least three stages: initial publication of the tender, review of bids, and a period for questions and answers. Subsequently, proposals are submitted, followed by potential interviews with proposers, necessary hearings, and finally, the announcement of the selected proposal.\u003c/p\u003e\n \u003c/span\u003e \u003cspan\u003e\n \u003cp\u003eB. \u0026apos;Frame tender\u0026apos;: for this type of tender, a \u0026apos;closed list of suppliers\u0026apos; is initially compiled, followed by a subsequent public competitive procedure where one or more suppliers are chosen from this pre-established list. In such tendering processes, the threshold and quality evaluation phase occur when the initial list of suppliers is compiled. Subsequently, these selected suppliers compete among themselves to provide the services or goods outlined in the framework tender. This approach allows for a relatively expedited process in selecting service providers. Primarily implemented in the healthcare system during the COVID-19 pandemic, it facilitated rapid responses to evolving needs such as establishing COVID-19 testing facilities and distributing vaccines to specific populations.\u003c/p\u003e\n \u003c/span\u003e \u003cspan\u003e\n \u003cp\u003eC. \u0026lsquo;Call for tenders\u0026rsquo; - a streamlined tender process that can be used to gather initial information and ultimately to set up a timed contract. It is usually used to establish new activities in a pilot configuration for a period of up to one year.\u003c/p\u003e\n \u003c/span\u003e \u003cspan\u003e\n \u003cp\u003eD. \u0026lsquo;Exemption from tendering\u0026rsquo; - certain circumstances permit contracting with service providers without undergoing a public tender process. For example, contracts with a financial scope below the threshold set by law for tender execution; urgent projects; the existence of a single provider or expert within Israel; contracts for specialized professional services necessitating specific knowledge, expertise, or trust relationships; engagements with the government or government corporations; joint ventures and partnerships with non-profit organizations.\u003c/p\u003e\n \u003c/span\u003e\n \u003cp\u003eIn addition, whether it pertains to a public tender or a framework tender within the healthcare system, an additional sub-category of tenders exists:\u003c/p\u003e\u003cspan\u003e\n \u003cp\u003eA. Price tender where the competition is focused on achieving the lowest costs;\u003c/p\u003e\n \u003c/span\u003e \u003cspan\u003e\n \u003cp\u003eB. Quality tender where the competition is aimed at delivering superior service quality;\u003c/p\u003e\n \u003c/span\u003e \u003cspan\u003e\n \u003cp\u003eC. Combined tender, which strikes a balance between price and quality (where the proportion between the two components may vary, such as 60% price and 40% quality, or vice versa). From a formal standpoint, most healthcare system tenders combine price and quality considerations.\u003c/p\u003e\n \u003c/span\u003e\n \u003cp\u003eHere, we sought to identify, reflect, and contextualize the processes and trends observed in tenders for healthcare services over the past decade amid increasingly stringent resource constraints. We also addressed the significance of economic considerations in tenders for healthcare providers.\u003c/p\u003e\n\u003c/div\u003e"},{"header":"2 Methods","content":"\u003cdiv id=\"Sec5\" class=\"Section2\"\u003e \u003ch2\u003e2.1 Setting\u003c/h2\u003e \u003cp\u003eIn July 2023, requests for information on all tenders for services provided by health professionals between 2013 and 2023 were submitted under the Freedom of Information Law to the Ministry of Health, and to the four HMOs (Clalit Health Services, Maccabi Healthcare Services, Meuhedet, and Leumit Health Care Services). The health services included in the requests were home care, home hospitalization, home hospice, home rehabilitation, laboratory services, geriatric services, psychological services, professional training, and ambulatory services. At the same time, information on public tenders in the healthcare sector were identified and cataloged using the 'Yifat Tenders' system and the Accountant General's Government Procurement Administration website.\u003c/p\u003e \u003c/div\u003e \u003cdiv id=\"Sec6\" class=\"Section2\"\u003e \u003ch2\u003e2.2 Data collection\u003c/h2\u003e \u003cp\u003eData collection took place between July and November 2023, yielding a total of 224 tenders for analysis. Each tender was assessed for the quality and price components of the proposals. The proportions of 'quality' and 'price' were based on the score mix defined as the criteria for winning the tender in the tender documents; i.e., the relative weight assigned to the quality of the submitted proposal (expressed as X% quality out of a score of 100% required for winning) and the relative weight assigned to the price quote (expressed as Y% price out of a score of 100% required for winning).\u003c/p\u003e \u003c/div\u003e \u003cdiv id=\"Sec7\" class=\"Section2\"\u003e \u003ch2\u003e2.3 Statistical Analysis\u003c/h2\u003e \u003cp\u003eAll statistical analyses were conducted using Excel or R software under the supervision of an external statistician. Categorical variables were summarized using number and frequencies (%). The continuous variables were determined by Shapiro test as non-normally distributed; therefore, they were described as median and interquartile range (IQR). A correlation coefficient was computed to assess the relationship strength between the tender year and quality percentage defined in the tender, in order to examine trends over the analysis years. One way analysis of variance (ANOVA) was conducted to compare the average quality percentages across different periods, including the COVID-19 pandemic period and its preceding and subsequent years. Statistical significance was considered for p values less than 0.05.\u003c/p\u003e \u003c/div\u003e"},{"header":"3 Results","content":"\u003cp\u003eA total of 224 tenders were collected for the analysis period 2013\u0026ndash;2023 Notably, despite the legal obligation for conducting tenders, the number of tenders conducted by the four HMOs over the years was relatively small (only 35 tenders). Most engagements between HMOs and service providers occurred through one of the exemptions from tendering, predominantly utilizing the \u0026apos;single provider\u0026apos; approach.\u003c/p\u003e\n\u003cp\u003eBetween 2013 and 2018 the median quality percentage in provider contracts ranged from 0.6 to 0.7 (Table \u003cspan class=\"InternalRef\"\u003e1\u003c/span\u003e and Fig. \u003cspan class=\"InternalRef\"\u003e1\u003c/span\u003e), whereas the median price percentages (which are complementary to the quality percentage) ranged from 0.3 to 0.4. From 2018, the median quality percentage declined: in 2019, the median quality percentage decreased by about 33% and was 0.35 to 0.4 in 2020 and 2021, respectively. In 2022 and 2023, the median quality percentages increased to 0.6 and 0.5, respectively (Fig. \u003cspan class=\"InternalRef\"\u003e2\u003c/span\u003e). Over the years, it is evident that the frequency of the quality value among the tenders is 0 and 0.6compared to 0.4 and 1 in the price value (they also appear 48 times over the years) (Fig. \u003cspan class=\"InternalRef\"\u003e3\u003c/span\u003e).\u003c/p\u003e\n\u003cdiv class=\"gridtable\"\u003e\u0026nbsp;\u003ctable id=\"Tab1\" border=\"1\"\u003e\n \u003ccaption language=\"En\"\u003e\n \u003cdiv class=\"CaptionNumber\"\u003eTable 1\u003c/div\u003e\n \u003cdiv class=\"CaptionContent\"\u003e\n \u003cp\u003eMedian quality percentage and interquartile range by year in tenders for services provided by health professionals\u003c/p\u003e\n \u003c/div\u003e\n \u003c/caption\u003e\n \u003ccolgroup cols=\"4\"\u003e\u003c/colgroup\u003e\n \u003cthead\u003e\n \u003ctr\u003e\n \u003cth align=\"left\"\u003e\n \u003cp\u003eYear\u003c/p\u003e\n \u003c/th\u003e\n \u003cth align=\"left\"\u003e\n \u003cp\u003eNumber of tenders\u003c/p\u003e\n \u003c/th\u003e\n \u003cth align=\"left\" colspan=\"2\"\u003e\n \u003cp\u003eQuality percentage\u003c/p\u003e\n \u003cp\u003eMedian (IQR)\u003c/p\u003e\n \u003c/th\u003e\n \u003c/tr\u003e\n \u003c/thead\u003e\n \u003ctbody\u003e\n \u003ctr\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003e2013\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"char\"\u003e\n \u003cp\u003e8\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"char\"\u003e\n \u003cp\u003e0.7\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"char\"\u003e\n \u003cp\u003e(0.575, 0.7)\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003e2014\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"char\"\u003e\n \u003cp\u003e15\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"char\"\u003e\n \u003cp\u003e0.6\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"char\"\u003e\n \u003cp\u003e(0.425, 1)\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003e2015\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"char\"\u003e\n \u003cp\u003e10\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"char\"\u003e\n \u003cp\u003e0.7\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"char\"\u003e\n \u003cp\u003e(0.387, 0.925)\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003e2016\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"char\"\u003e\n \u003cp\u003e21\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"char\"\u003e\n \u003cp\u003e0.6\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"char\"\u003e\n \u003cp\u003e(0, 0.7)\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003e2017\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"char\"\u003e\n \u003cp\u003e27\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"char\"\u003e\n \u003cp\u003e0.6\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"char\"\u003e\n \u003cp\u003e(0.4125, 0.7)\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003e2018\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"char\"\u003e\n \u003cp\u003e29\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"char\"\u003e\n \u003cp\u003e0.6\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"char\"\u003e\n \u003cp\u003e(0.15, 0.6)\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003e2019\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"char\"\u003e\n \u003cp\u003e16\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"char\"\u003e\n \u003cp\u003e0.4\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"char\"\u003e\n \u003cp\u003e(0.2, 0.6)\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003e2020\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"char\"\u003e\n \u003cp\u003e20\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"char\"\u003e\n \u003cp\u003e0.35\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"char\"\u003e\n \u003cp\u003e(0, 0.45)\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003e2021\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"char\"\u003e\n \u003cp\u003e20\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"char\"\u003e\n \u003cp\u003e0.4\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"char\"\u003e\n \u003cp\u003e(0, 0.6)\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003e2022\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"char\"\u003e\n \u003cp\u003e30\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"char\"\u003e\n \u003cp\u003e0.6\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"char\"\u003e\n \u003cp\u003e(0.462, 0.6)\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003ctr\u003e\n \u003ctd align=\"left\"\u003e\n \u003cp\u003e2023\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"char\"\u003e\n \u003cp\u003e28\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"char\"\u003e\n \u003cp\u003e0.5\u003c/p\u003e\n \u003c/td\u003e\n \u003ctd align=\"char\"\u003e\n \u003cp\u003e(0.275, 0.6)\u003c/p\u003e\n \u003c/td\u003e\n \u003c/tr\u003e\n \u003c/tbody\u003e\n \u003c/table\u003e\n\u003c/div\u003e\n\u003cp\u003eA statistically significant weak negative correlation was found between the quality percentage and years (r=-0.185, p\u0026thinsp;\u0026lt;\u0026thinsp;0.01), indicating that quality percentages tended to decrease over the years.\u003c/p\u003e\n\u003cp\u003eANOVA, conducted to assess whether there were significant differences in the median quality percentages during the COVID-19 pandemic (defined for this study as January 30, 2020, to January 30, 2023), showed a statistically significant effect of this period on the quality percentage variable (F[1, 219]\u0026thinsp;=\u0026thinsp;5.47, p\u0026thinsp;\u0026lt;\u0026thinsp;0.05). Tukey\u0026apos;s Honest Significant Difference test, performed to elucidate the direction and magnitude of this effect during the COVID-19 period, showed that, the quality percentages statistically significantly decreased by 10.14 percentage points during this period (p\u0026thinsp;\u0026lt;\u0026thinsp;0.05).\u003c/p\u003e\n\u003cp\u003eTo explore variations among different types of tenders, we compared the quality percentages of tenders for health services directly impacting patients over extended periods (e.g., home care, home hospitalization, student health services) with the quality percentages of tenders for health services having indirect impacts on patients (e.g., instruction and training services, administrative personnel services). The median quality percentage of tenders for health services directly impacting patients over extended periods was statistically significant higher compared with the median quality percentage of tenders for health services having indirect impacts on patients (p\u0026thinsp;\u0026lt;\u0026thinsp;0.05 by Wilcoxon\u0026rsquo;s signed ranked test).\u003c/p\u003e"},{"header":"4. Discussion","content":"\u003cp\u003eIn recent years, it seems that economic considerations have increasingly become a central factor in the decision-making processes of healthcare organizations and institutions. Unfortunately, this trend often occurs at the expense of potentially compromising the quality and safety of public health services. This study\u0026rsquo;s findings suggest a discernible trend over the years wherein greater emphasis is placed on the price component, resulting in situations where service providers offering the lowest cost, rather than the highest quality, are awarded the tender.\u003c/p\u003e \u003cp\u003eDespite declarations by healthcare organizations prioritizing quality and assigning it a higher weight in tenders, reality often sees price becoming the decisive factor, even when there is a significant disparity in quality scores favoring higher bids. This is a commonly acknowledged situation within the healthcare system, particularly among clinical professionals, although it may not always be openly acknowledged.\u003c/p\u003e \u003cp\u003eIt is important to note that price is not inherently negative, and there is certainly merit in considering cost factors. However, when it comes to healthcare services, it is imperative to establish effective safeguards against price becoming the sole determining factor, especially in tenders involving professional personnel such as doctors, nurses, and other healthcare professionals. When price dictates service quality and safety, providers may resort to employing lower-quality personnel to reduce costs. Thus, when a provider offers an exceptionally low price, almost reaching the point of operating at a loss, it typically results in one of two outcomes: either a significant deterioration in the quality of public health services or a gradual escalation in prices over the service period. In either scenario, both the healthcare system and the public suffer adverse consequences.\u003c/p\u003e \u003cp\u003eOne potential safeguard is to establish a minimum price within tenders to ensure the quality and safety of health services provided to the public. While healthcare organizations may be driven to utilize the price component to mitigate deficits, they must also recognize the broader implications for public health. As the price component assumes greater prominence, particularly in tenders involving professional personnel, there is a greater risk of compromising quality and safety. The results of this study have shown that this phenomenon appears to be more prevalent in more significant tenders, involving professional personnel and services with a direct impact on patients for extended periods.\u003c/p\u003e \u003cdiv id=\"Sec10\" class=\"Section2\"\u003e \u003ch2\u003e4.1 Economic efficiency versus equity\u003c/h2\u003e \u003cp\u003eThe study simulates the delicate balance between achieving economic efficiency and realizing the equity principle within the tender procedure, reflecting the classic economic concept of the trade-off between efficiency and equity. Equity is enshrined as one of three fundamental values of Israel\u0026rsquo;s NHIL [\u003cspan citationid=\"CR5\" class=\"CitationRef\"\u003e5\u003c/span\u003e]. Policymakers in healthcare are required to to address public health needs and the realization of services when the demand for healthcare services is not saturated. Therefore, decisions regarding the allocation of limited resources must be based on the principles of equity and efficiency. Sometimes these principles conflict with each other: while efficiency seeks to maximize overall population health given resource constraints, equity aims to ensure fair resource distribution and accessibility to healthcare services in order to minimize disparities among population groups [\u003cspan additionalcitationids=\"CR7\" citationid=\"CR6\" class=\"CitationRef\"\u003e6\u003c/span\u003e\u0026ndash;\u003cspan citationid=\"CR8\" class=\"CitationRef\"\u003e8\u003c/span\u003e]. The study provides an example where considerations of efficiency and equity may appear at odds in tenders for healthcare services. Furthermore, the study findings underscore the role of tenders in selecting service providers, aligning with the economic principle of market mechanisms for resource allocation. Public tenders serve as a prevalent economic tool for fostering competitive procurement and the efficient allocation of public resources [\u003cspan citationid=\"CR9\" class=\"CitationRef\"\u003e9\u003c/span\u003e].\u003c/p\u003e \u003c/div\u003e \u003cdiv id=\"Sec11\" class=\"Section2\"\u003e \u003ch2\u003e4.2 Regulation and market failures\u003c/h2\u003e \u003cp\u003eThe theory of the free market asserts that crises can be resolved without economic intervention, as its \"invisible hand\" will optimally allocate resources. A prevalent suggestion often made in discussions surrounding healthcare planning and policy reforms, is that the market should be left alone to efficiently distribute healthcare resources while the government should not be involved. Advocates argue that government laws and regulations in the healthcare services market disrupt the appropriate allocation of resources and lead to inefficiencies. Nevertheless, although a market that meets all conditions for efficient resource allocation is an ideal in economic theory, it is rare in the real world. Markets fail because he necessary conditions for perfect/free markets are rarely met, particularly in the healthcare sector, which is prone to numerous market failures such as limited suppliers, information asymmetry, moral risks, inflexible demand, and manufacturers that do not maximize profits.\u003c/p\u003e \u003cp\u003eThe legal obligations and regulations governing tender processes can be linked to economic theories concerning market failures. Government intervention through regulations and tenders is often warranted in situations where markets may struggle to achieve optimal outcomes independently. The conclusion underscores the need for implementing effective safeguards against turning price into the deciding factor in tender awards. This is crucial to mitigate economic manipulations by service providers competing in tenders, which may compromise the quality and safety of healthcare services. Moreover, this aligns with the economic concept of externalities, where government intervention may be necessary to address unintended consequences in the market, particularly in the context of public health [\u003cspan citationid=\"CR10\" class=\"CitationRef\"\u003e10\u003c/span\u003e].\u003c/p\u003e \u003c/div\u003e \u003cdiv id=\"Sec12\" class=\"Section2\"\u003e \u003ch2\u003e4.3 Price as a determining factor\u003c/h2\u003e \u003cp\u003eEvidence-based policy and decision-making in healthcare necessitate considering the benefits of interventions as well as their required resources. Nevertheless, within the realm of public health, many individuals lack an understanding of how interventions should be selected, particularly in the framework of economic evaluations. The utilization of economic health evidence to guide decision-making and resource allocation in healthcare is increasingly pertinent as the global population ages and healthcare resource consumption rises. The limited availability of resources for medical care, make it impractical to implement any health intervention. Resource constraints compel us to continually make choices between alternatives in nearly every situation. Our findings revealed a trend wherein undue emphasis is placed on the price component in tender decisions, potentially jeopardizing the quality or safety of healthcare services. This trend mirrors the economic principle of cost-benefit analysis and underscores the challenges associated with prioritizing cost savings over quality in public service provision [\u003cspan citationid=\"CR11\" class=\"CitationRef\"\u003e11\u003c/span\u003e].\u003c/p\u003e \u003c/div\u003e \u003cdiv id=\"Sec13\" class=\"Section2\"\u003e \u003ch2\u003e4.4 The long-term implications of a cost-centric approach\u003c/h2\u003e \u003cp\u003eTime plays a crucial role in health economic evaluations, as the timing and duration of clinical events, medical interventions, and their consequences affect estimated costs and effects. The scope of policy questions addressed by health economic analyses may change over time. While some policy decisions may yield only short-term consequences, others may have ramifications years later because their effects may not be immediately apparent or because they impact both current and future groups. Therefore, health economic models must accurately simulate time to provide dependable information on resource allocation. The discussion on the long-term consequences of a price-driven approach to healthcare procurement aligns with economic theories concerning intertemporal decision-making. While short-term cost savings may seem appealing, they can potentially lead to adverse long-term effects on public health [\u003cspan citationid=\"CR12\" class=\"CitationRef\"\u003e12\u003c/span\u003e].\u003c/p\u003e \u003c/div\u003e \u003cdiv id=\"Sec14\" class=\"Section2\"\u003e \u003ch2\u003e4.5 \u003cb\u003eStrengths and limitations\u003c/b\u003e\u003c/h2\u003e \u003cp\u003eThe use of various statistical methods for data analysis enables a comprehensive examination of the findings, facilitating the identification of relationships between variables. This study relied on data from official sources, including HMOs and the Ministry of Health, thereby supporting the reliability of the results. The HMOs are responsible for providing most healthcare services to the public - either independently or through external providers. However, in view of the finding that HMOs engage in non-tendered contracting practices, much of the data underlying this research originates from the Ministry of Health. Therefore, if HMOs were to consistently utilize tender procedures for every service provider contract, it could potentially increase the number of tenders and offer a more accurate depiction of the situation. Moreover, in Israel, the COVID-19 pandemic period was also subject to other significant events, such as military conflicts and multiple elections, which complicated the isolation of the pandemic\u0026rsquo;s specific impact on the quality percentages in tenders. Furthermore, while most tenders prioritize price as a central component, they often include threshold conditions aimed at safeguarding the quality of the supplier or service. However, many of these threshold conditions are minimal and may not effectively ensure quality standards.\u003c/p\u003e \u003c/div\u003e"},{"header":"5. Conclusions","content":"\u003cp\u003eThe study findings suggest that over the years economic considerations have become increasingly dominant, and at times even dictate, the decision-making processes within tenders for healthcare services providers, so that the emphasis on quality is diminished. Although the healthcare system often emphasizes the importance of service quality, the selection of service providers appears to be primarily driven by price during the tender process. This phenomenon is particularly noticeable in significant tenders for the direct provision of healthcare services over extended periods, potentially posing challenges to maintaining the quality and safety of public health services.\u003c/p\u003e \u003cp\u003eThe analyses also indicate a statistically significant impact of the COVID-19 period on median quality percentages, underscoring the influence of emergency events like the pandemic on the quality of healthcare services.\u003c/p\u003e \u003cp\u003eThe study also highlights the necessity of establishing effective mechanisms to safeguard the quality and safety of healthcare services in addition to incorporating economic considerations into tender processes. Key components of the healthcare system, such as transparency, fairness, and integrity, highlight the necessity of averting price from becoming the determining factor in contracting processes. Instead, they underscore the importance of prioritizing efficiency, quality, and safety in healthcare services. Additional research is necessary to thoroughly understand the effects of prioritizing price in tender processes and to assess its potential implications on healthcare outcomes.\u003c/p\u003e"},{"header":"Declarations","content":"\u003cp\u003e\u003cstrong\u003eAuthor Contributions\u003c/strong\u003e:\u0026nbsp;\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eFunding:\u0026nbsp;\u003c/strong\u003eThis manuscript was not supported by any external funding\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eConflict of Interest:\u003c/strong\u003e The authors have no conflicts of interest to declare.\u0026nbsp;\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eData Availability Statement\u003c/strong\u003e: The raw data supporting the conclusions of this article will be made available by the authors, without undue reservation.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eEthics Approval:\u0026nbsp;\u003c/strong\u003eEthics approval was not required as the study did not include humans subjects or animals\u003cstrong\u003e\u0026nbsp;\u003c/strong\u003e\u0026nbsp;\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eInformed consent:\u0026nbsp;\u003c/strong\u003eNot applicable\u003c/p\u003e"},{"header":"References","content":"\u003col\u003e\u003cli\u003e\u003cspan\u003eClarfield AM, Manor O, Nun GB, Shvarts S, Azzam ZS, Afek A et al. Health and health care in Israel: an introduction. Lancet : 2017, 389(10088):2503\u0026thinsp;\u0026ndash;\u0026thinsp;13.10.1016/s0140-6736(17)30636-0.\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eMandatory. Tenders Law 5752\u0026thinsp;\u0026ndash;\u0026thinsp;1992. In.\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eAppeal an Administrative Agency Decision 5949/07 Amishragaz. - Natural Gas Ltd. v. Paz-Gas Ltd.. 1993.\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eThe Mandatory Tenders Regulations. 5753\u0026thinsp;\u0026ndash;\u0026thinsp;1993. In.\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eIsraeli Online Legislation Database. National Health Insurance Law [\u003cspan class=\"ExternalRef\"\u003e\u003cspan class=\"RefSource\"\u003ehttps://main.knesset.gov.il/Activity/Legislation/Laws\u003c/span\u003e\u003cspan address=\"https://main.knesset.gov.il/Activity/Legislation/Laws\" targettype=\"URL\" class=\"RefTarget\"\u003e\u003c/span\u003e\u003c/span\u003e/Pages/LawPrimary.aspx?t=lawlaws HYPERLINK https://main.knesset.gov.il/Activity/Legislation/Laws/Pages/LawPrimary.aspx?t=lawlaws\u0026amp;st=lawlaws\u0026amp;lawitemid=2000111\u0026amp; HYPERLINK https://main.knesset.gov.il/Activity/Legislation/Laws/Pages/LawPrimary.aspx?t=lawlaws\u0026amp;st=lawlaws\u0026amp;lawitemid=2000111st=lawlaws HYPERLINK https://main.knesset.gov.il/Activity/Legislation/Laws/Pages/LawPrimary.aspx?t=lawlaws\u0026amp;st=lawlaws\u0026amp;lawitemid=2000111\u0026amp; HYPERLINK https://main.knesset.gov.il/Activity/Legislation/Laws/Pages/LawPrimary.aspx?t=lawlaws\u0026amp;st=lawlaws\u0026amp;lawitemid=2000111lawitemid=2000111.]\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eCulyer AJ. The bogus conflict between efficiency and vertical equity. Health Econ 2006, 15(11):1155\u0026thinsp;\u0026ndash;\u0026thinsp;8.10.1002/hec.1158.\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eJehu-Appiah C, Baltussen R, Acquah C, Aikins M, d'Almeida SA, Bosu WK et al. Balancing equity and efficiency in health priorities in Ghana: the use of multicriteria decision analysis. Value Health : 2008, 11(7):1081\u0026thinsp;\u0026ndash;\u0026thinsp;7.10.1111/j.1524-4733.2008.00392.x.\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eWhitehead M. The concepts and principles of equity and health. Int J Health Serv 1992, 22(3):429\u0026thinsp;\u0026ndash;\u0026thinsp;45.10.2190/986l-lhq6-2vte-yrrn.\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eGarc\u0026iacute;a-Alt\u0026eacute;s A, McKee M, Siciliani L, Barros PP, Lehtonen L, Rogers H et al. Understanding public procurement within the health sector: a priority in a post-COVID-19 world. Health Econ Policy Law : 2023, 18(2):172\u0026thinsp;\u0026ndash;\u0026thinsp;85.10.1017/s1744133122000184.\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eMwachofi A, Al-Assaf AF. Health care market deviations from the ideal market. Sultan Qaboos Univ Med J. 2011;11(3):328\u0026ndash;37.\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eTurner HC, Sandmann FG, Downey LE, Orangi S, Teerawattananon Y, Vassall A et al. What are economic costs and when should they be used in health economic studies? Cost Eff Resour Alloc : 2023, 21(1):31.10.1186/s12962-023-00436-w.\u003c/span\u003e\u003c/li\u003e \u003cli\u003e\u003cspan\u003eO'Mahony JF, Newall AT, van Rosmalen J. Dealing with Time in Health Economic Evaluation: Methodological Issues and Recommendations for Practice. Pharmacoeconomics 2015, 33(12):1255\u0026thinsp;\u0026ndash;\u0026thinsp;68.10.1007/s40273-015-0309-4.\u003c/span\u003e\u003c/li\u003e\u003c/ol\u003e"}],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":true,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":false,"highlight":"","institution":"","isAcceptedByJournal":true,"isAuthorSuppliedPdf":false,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":false,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"bmc-health-services-research","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":false,"externalIdentity":"bhsr","sideBox":"Learn more about [BMC Health Services Research](http://bmchealthservres.biomedcentral.com/)","snPcode":"","submissionUrl":"https://www.editorialmanager.com/BHSR/default.aspx","title":"BMC Health Services Research","twitterHandle":"BMC_series","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"em","reportingPortfolio":"BMC Series","inReviewEnabled":true,"inReviewRevisionsEnabled":true},"keywords":"Israel, healthcare administration, tender, healthcare services, quality, price","lastPublishedDoi":"10.21203/rs.3.rs-4826321/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-4826321/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003e\u003cstrong\u003eBackground and objectives\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003ePublic healthcare systems face constraints in financial and professional resources. The Mandatory Tenders Law 5752 − 1992 stipulates that before entering into a contract for the supply of a service or product, public authorities and government corporations must undergo a public tender process. We sought to identify and contextualize the trends observed in tenders for healthcare services over the past decade amid increasingly stringent resource constraints. What prevails over what: \u003cstrong\u003equality\u003c/strong\u003e or \u003cstrong\u003eprice?\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eMethods\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eAll tenders for services provided by health professionals published by the Ministry of Health and health maintenance organizations between 2013 and 2023 were collected. Each tender was assessed for the quality and price components. Trends in the quality and price percentage were evaluated.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eResults\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eA total of 224 tenders were analyzed. A statistically significant weak negative correlation was found between the quality percentage and years (r=-0.185, p \u0026lt; 0.01), indicating that quality percentages tended to decrease over the years. The quality percentages statistically significantly decreased by 10.14 percentage points during the COVID-19 period (p \u0026lt; 0.05). The median quality percentage of tenders for health services directly impacting patients over extended periods was statistically significant higher compared with the median quality percentage of tenders for health services having indirect impacts on patients (p \u0026lt; 0.05).\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eConclusions\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eDespite healthcare organizations prioritizing quality and seemingly assigning it a higher weight in tenders, price is often the decisive factor. Effective mechanisms to safeguard the quality and safety of healthcare services in addition to incorporating economic considerations into tender processes should be established.\u003c/p\u003e","manuscriptTitle":"Trends and changes in the relationship between quality and price in tenders for healthcare services in the Israeli health system, 2013-2023","msid":"","msnumber":"","nonDraftVersions":[{"code":1,"date":"2024-09-03 11:40:45","doi":"10.21203/rs.3.rs-4826321/v1","editorialEvents":[{"type":"communityComments","content":0},{"type":"decision","content":"Revision requested","date":"2024-07-31T10:08:36+00:00","index":"","fulltext":""},{"type":"editorAssigned","content":"","date":"2024-07-31T03:04:21+00:00","index":"","fulltext":""},{"type":"checksComplete","content":"","date":"2024-07-31T03:04:04+00:00","index":"","fulltext":""},{"type":"submitted","content":"BMC Health Services Research","date":"2024-07-30T06:57:30+00:00","index":"","fulltext":""}],"status":"published","journal":{"display":true,"email":"[email protected]","identity":"bmc-health-services-research","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":false,"externalIdentity":"bhsr","sideBox":"Learn more about [BMC Health Services Research](http://bmchealthservres.biomedcentral.com/)","snPcode":"","submissionUrl":"https://www.editorialmanager.com/BHSR/default.aspx","title":"BMC Health Services Research","twitterHandle":"BMC_series","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"em","reportingPortfolio":"BMC Series","inReviewEnabled":true,"inReviewRevisionsEnabled":true}}],"origin":"","ownerIdentity":"526cc6ed-23b0-4d6d-a9a4-7536f7927aeb","owner":[],"postedDate":"September 3rd, 2024","published":true,"recentEditorialEvents":[],"rejectedJournal":[],"revision":"","amendment":"","status":"published-in-journal","subjectAreas":[],"tags":[],"updatedAt":"2024-12-23T16:06:15+00:00","versionOfRecord":{"articleIdentity":"rs-4826321","link":"https://doi.org/10.1186/s12913-024-11963-4","journal":{"identity":"bmc-health-services-research","isVorOnly":false,"title":"BMC Health Services Research"},"publishedOn":"2024-12-18 15:58:34","publishedOnDateReadable":"December 18th, 2024"},"versionCreatedAt":"2024-09-03 11:40:45","video":"","vorDoi":"10.1186/s12913-024-11963-4","vorDoiUrl":"https://doi.org/10.1186/s12913-024-11963-4","workflowStages":[]},"version":"v1","identity":"rs-4826321","journalConfig":"researchsquare"},"__N_SSP":true},"page":"/article/[identity]/[[...version]]","query":{"redirect":"/article/rs-4826321","identity":"rs-4826321","version":["v1"]},"buildId":"qtupq5eGEP_6zYnWcrvyt","isFallback":false,"isExperimentalCompile":false,"dynamicIds":[84888],"gssp":true,"scriptLoader":[]}