Innovative solutions are gradually becoming an inseparable part of modern life. Today, few people are surprised by autonomous vehicles or the functionality of smart devices. However, when visiting healthcare institutions in Lithuania, it can still feel as though time has been turned back several decades. While renovated and comfortable premises are often publicly welcomed, there are still many concerns about the treatment process itself: outdated equipment and approaches, frequent misunderstandings, unpleasant experiences, and a lack of innovative solutions. Considering that the medical sector globally is one of the most attractive fields for implementing innovation, the question arises: why are innovations in Lithuania’s medical sector still so rare?
Good examples can be counted on one hand
Every year, more than EUR 4 billion is spent on public procurement in Lithuania. However, only a very small share of public budget funds is used to purchase innovations and improve services, including in the healthcare and medical sectors. Both healthcare institutions purchasing innovations and suppliers offering such solutions can still be counted on one hand.
For example, the Lithuanian Sea Museum, seeing that animal-assisted therapy is becoming increasingly in demand every year, decided to acquire a unified methodology for this type of procedure. The new methodology would help ensure more effective interaction between humans and animals and strengthen the therapeutic benefits arising from it. Dolphin-assisted therapy sessions help people with disabilities integrate more easily into society, improve their emotional state, and support motor skills.
Medical innovations have also been purchased more than once by Vilnius University Hospital Santaros Clinics. Facing the challenge of distinguishing tissues of similar colours during surgery, the institution’s surgeons identified the need to acquire an innovative lamp. Light sources used in other fields had the necessary properties, but they had not been adapted for medical use. The newly adapted and acquired technology would help ensure higher-quality and safer open interventional surgeries.
The problem: lack of knowledge and competencies
Although such examples are increasing in Lithuania, the overall situation has not yet changed significantly. Why?
In both the medical sector and other areas of the public sector, the most pressing issue is the insufficient competence of public procurement specialists in purchasing innovations. At the same time, those who can offer new solutions often lack knowledge of public procurement and the skills needed to participate in such processes. On the one hand, specialists lack knowledge about innovations themselves. On the other hand, they lack knowledge and skills on how to properly purchase or offer them in accordance with all public procurement procedures.
Abroad, this problem is addressed by establishing competence centres that not only train public procurement specialists but also advise entire institutions on opportunities to purchase innovations and innovative solutions. Often, institutions do not even realise that existing problems can be solved in innovative ways. Instead, they choose familiar, widely available, but outdated and therefore cheaper solutions. Such choices block improvement, slow growth and development, and reduce competitiveness. Although the benefits of innovation development may be difficult to see in the short term, global practice proves otherwise.
Insufficient innovation culture
Another reason why innovation procurement in the medical sector is slow is the lack of innovation culture within organizations. It is observed that in institutions where leadership is open to innovation and encourages employees to propose innovative solutions – sometimes even rewarding them for it – innovation procurement happens more often and more smoothly. Even legal regulation, which others may see as a major obstacle to purchasing innovation, becomes a source of opportunity in such institutions. Of course, responsibility should not fall solely on management, but when leadership views innovation positively, it is much easier to convince the organization to acquire it.
Another challenge preventing innovations from entering the medical sector more often is financial cost and the risk associated with innovation. Innovations require significant investment and do not always prove successful, so it is understandable that publicly funded institutions avoid taking risky decisions to purchase innovations. Moreover, innovation procurement may lead to complaints from interested suppliers, not always justified, which can make the process more complicated and longer.
Two sides of the same coin
On the other hand, just as a coin has two sides, innovation procurement requires two components: contracting authorities and suppliers able to offer innovations to the medical sector. This creates another problem – suppliers also lack the knowledge, skills, and competencies needed to participate in innovation public procurement. Since this type of procurement is not yet widely used, companies, research centres, and institutes developing innovations have not yet become familiar with all the specific features, stages, and requirements of such procurement.
In addition, some innovation procurement procedures, especially pre-commercial procurement, can last several years and require significant supplier resources. Sometimes, when the financial return is unclear, suppliers may struggle to find motivation to develop the best possible product, especially if, in the case of pre-commercial procurement, the prototype they develop will not be purchased on a large scale once the process is completed. The essence of pre-commercial procurement is the development and testing of a prototype, but to purchase a specific product or solution, contracting authorities must announce another procurement procedure, such as an innovative procurement. Not all suppliers are willing to go through all stages of pre-commercial procurement only to later offer their developed and tested prototype in newly announced innovative procurement calls.
Two initiatives to encourage innovation
To make innovation in the medical sector more common and ensure that its benefits are felt by both patients and healthcare professionals, the Lithuanian Innovation Centre joined the international Interreg Europe initiative iBuy. This initiative aims to encourage the public sector to stimulate the creation and implementation of innovations through innovation public procurement in various public and budgetary institutions, including the medical sector.
As part of this initiative, the Lithuanian Innovation Centre prepared Guidelines for Innovative Public Procurement, providing relevant methodological information on the implementation of innovation public procurement. The guidelines include information for contracting authorities on the benefits of innovation procurement, identify possible barriers and problems that may arise during implementation, and provide potential solutions. They also explain the stages of innovation public procurement and contribute to encouraging its wider application in Lithuania.
The Lithuanian Innovation Centre also prepared a 10-step guide for Lithuania in English, outlining what measures should be taken to ensure that by 2030 at least 20% of public procurement across all economic sectors, including medicine, would be innovation public procurement. The recommendations include improving monitoring and measurement of innovation procurement, establishing a competence centre to help public sector institutions carry out innovation procurement, and creating a motivation system for public sector pioneers in innovation procurement.
According to Justė Rakštytė-Hoimian, Public Sector Innovation Expert at the Lithuanian Innovation Centre, although these two documents will not change the situation overnight, they are an initial source of information and inspiration that can encourage the public sector to rethink its public procurement practices and begin purchasing more innovations. “For innovation public procurement to deliver tangible benefits, the first step is the decision to do it. Everything else is a matter of experience and skills, both of which are gained over time,” she says.
Efforts also focused on SMEs
In addition to efforts to mobilize the public sector, the Lithuanian Innovation Centre is also working to encourage suppliers. Health Technology Cluster iVita, coordinated by the Centre, together with partners of the Erasmus+ international HAePPI initiative, prepared an analysis of gaps and needs in innovation public procurement for small and medium-sized enterprises. The analysis examines the other side of the coin – suppliers’ opportunities, needs, and difficulties in participating in innovation public procurement.
The analysis provides detailed information for SMEs on what knowledge, skills, and procedures are needed to participate in and win such procurement procedures, and introduces success stories and good practice examples. Based on the research, six different topics were identified, covering all identified gaps and needs for suppliers to participate in pre-commercial and innovative public procurement. The need and usefulness of a training course were confirmed by the stakeholders surveyed by the project partners. By the end of this year, thanks to the HAePPI partners, a new training course on pre-commercial and innovative public procurement will be developed, with the aim of particularly encouraging small and medium-sized enterprises to participate in such tenders.
According to Diana Vertelkienė, coordinator of Health Technology Cluster iVita, the prepared document analyses opportunities for the housing and medical or wellness sectors to participate in innovation public procurement, but in practice the analysis could also be useful for other business sectors that can and want to offer innovations to the public sector. “During the analysis, companies operating in the housing and wellness sectors were surveyed, and they confirmed that they lack knowledge and information about opportunities to participate in innovation public procurement. We hope that this document and the training course we are preparing will become a starting point for innovative businesses to cooperate more actively with the public sector,” said D. Vertelkienė.
Source: Lithuanian Innovation Centre, De Futuro
