Comparative Analysis of Supplier Selection in Public vs. Private Hospitals

Thesis Abstract

In many health systems, supplier selection processes in public and private hospitals differ in rigor, transparency, and outcomes, yet comparative empirical evidence remains fragmented and context-specific. This study addresses the gap by examining how supplier selection practices influence procurement performance, quality of care, and cost efficiency in contrasting hospital sectors. The aim is to identify determinants, processes, and consequences of supplier selection that explain sectoral differences and to develop a framework for improving procurement effectiveness across hospital types. The specific objectives are (i) to compare supplier qualification criteria, evaluation weighting, and procurement transparency between public and private hospitals; (ii) to assess the relationship between supplier selection practices and procurement performance indicators (lead time, cost savings, and contract compliance); (iii) to evaluate the impact of supplier selection on clinical supply continuity and product quality; (iv) to explore managers’ and clinicians’ perceptions of the fairness and responsiveness of supplier decisions; and (v) to propose a sector-transcending model for optimal supplier selection grounded in institutional theory and transaction cost economics. A mixed-methods design is employed, integrating a cross-sectional survey with semi-structured interviews and document analysis. The study population comprises procurement managers, supply chain directors, and clinical representatives from 40 hospitals evenly split between public and private sectors within a metropolitan health district. A stratified random sample yields 200 survey respondents, complemented by 40 in-depth interviews to capture contextual nuances. Data collection instruments include a structured questionnaire measuring supplier evaluation criteria, decision transparency, and procurement performance, as well as interview guides designed to elicit insights on organizational governance, risk management, and supplier relationships. The instruments are developed from established scales in purchasing and supply research and adapted to hospital procurement contexts, with content validity assessed by a panel of supply chain scholars and clinical stakeholders. Reliability is evaluated using Cronbach’s alpha and composite reliability checks, and pilot testing (n=30) informs refinements. Quantitative data will be analyzed using descriptive statistics, independent-samples t-tests, and multivariate regression analyses to test the association between supplier selection practices and procurement performance, controlling for hospital size, ownership model, and market concentration. Structural equation modeling (SEM) will be employed to test the hypothesized pathways linking selection criteria, transparency, and performance to supply continuity and clinical quality outcomes. Qualitative data from interviews will be analyzed through thematic analysis, with coding conducted iteratively to identify recurring patterns related to governance, risk, and value generation, and then integrated with quantitative results via a convergent parallel design. The analysis will be guided by two theoretical lenses institutional theory, to explain how regulatory and organizational norms shape supplier selection, and transaction cost economics, to elucidate how governance mechanisms mitigate procurement-related costs and information asymmetries. Expected findings include (a) public hospitals exhibit more formalized, regulation-driven supplier selection processes with higher compliance requirements but longer cycle times, whereas private hospitals emphasize rapid procurement and flexibility, potentially at the expense of formal transparency; (b) stronger alignment between selection criteria and procurement performance correlates with reduced procurement lead times and higher contract compliance in both sectors, but with stronger effects in private settings; (c) supplier continuity and product quality are positively associated with systematic evaluation frameworks, particularly where risk management and vendor performance monitoring are embedded; (d) perceived fairness and transparency mediate the relationship between selection practices and stakeholder trust, influencing policy acceptance and adoption of best practices. The study contributes to knowledge by offering a sector-comparative, process-oriented model of supplier selection that integrates governance, performance, and clinical outcomes within hospital supply chains. It provides practical recommendations for harmonizing supplier evaluation standards, enhancing transparency, and designing governance structures that balance efficiency with patient safety. The main conclusion is that standardized, evidence-based supplier selection frameworks anchored in institutional norms and transaction-cost considerations can improve procurement performance and clinical outcomes across both public and private hospitals; recommendations include adopting a common core of evaluation criteria, implementing real-time supplier performance dashboards, and fostering intersectoral learning through shared procurement governance platforms.