Efficiency of Procurement Procedures for Medical Devices

The paper investigates the efficiency of procurement for medical devices. Differentiation of products in this market, due to doctors' preferences for specific technologies, might reduce the number of suppliers and the potential positive impact of auctions relative to negotiations. Using a large official dataset on technological equipment purchased by Italian hospitals in the period 1995-2005, we run an empirical analysis of the differential impact of procurement procedures on the purchasing price, controlling for several factors like product differentiation and number of suppliers. The policy implication is that incentives are needed for managers and doctors when auctions cannot ensure efficiency in procurement.