In a new piece for Pulse+IT, our Dublin Manager, Eimear Galvin explores Ireland’s innovation paradox

Ireland is home to one of Europe’s most vibrant medtech and digital health ecosystems. More than 550 companies operate across the sector, employing over 84,000 people and generating exports exceeding €100 billion annually.

Irish-based firms design, build and scale technologies used in health systems across the world. Yet a paradox persists: Irish health technology start-ups and SMEs often struggle to sell into their own public health system.

While indigenous companies routinely secure international customers, domestic adoption within the HSE is comparatively rare. This disconnect is not primarily about quality or capability. Rather, it reflects structural features of how healthcare procurement is designed, governed and executed.

Procurement

Public healthcare procurement in Ireland is designed to minimise risk, ensure regulatory compliance and deliver value for money at scale. These are legitimate and necessary objectives.

However, the mechanisms used to achieve them – large framework agreements, high financial thresholds and rigid contractual models – tend to favour established multinational suppliers. For early stage and scaling companies, the consequences are significant.

Qualification criteria may require turnover levels far exceeding contract value, while multiyear frameworks can lock emerging suppliers out for extended periods. Even where a clear clinical need exists, the transition from pilot to purchase can take 12 to 24 months – an eternity for small firms dependent on revenue to survive.

Digital health suppliers encounter additional structural friction. Procurement processes remain largely hardware-centric, using financial liquidity as a proxy for delivery risk. Software operates with fundamentally different cost structures, lifecycle dynamics and scalability models. Applying device style thresholds to software-as-a-service platforms, clinical decision support tools, interoperability solutions or AI-enabled diagnostics, systematically disadvantages the very innovators health systems increasingly depend upon. The result is a procurement environment that unintentionally filters out innovation.

‘Permanent pilot’ mode

This challenge is not theoretical. Throughout the Health Innovation Hub Ireland (HIHI) and Health Innovation Research Alliance NI (HIRANI) ‘Buying All-island in Healthcare – North and South’  report, Irish digital health SMEs and start-ups frequently report facing financial and contractual criteria designed for capital intensive medical devices.

During the Covid-19 pandemic, several Irish companies successfully deployed remote patient monitoring to support early discharge, virtual wards and chronic disease management. Despite demonstrated clinical value and strong staff acceptance, many of these solutions struggled to transition into routine procurement once emergency conditions abated. Without a clear post pilot purchasing pathway, technologies risk becoming trapped in ‘permanent pilot’ mode. Sustained through extensions or local arrangements that create uncertainty for both providers and suppliers.

Innovation supports

Over the past decade, Ireland has invested significantly in innovation supports. Testbeds, pilot programmes and research collaborations, facilitated through HIHI’s four hubs, have enabled companies to validate technologies in real clinical environments. However, local validation does not guarantee domestic adoption. For many, a successful pilot becomes a dead end rather than a gateway to scale. The company uses the data generated through the Irish study to penetrate more accessible markets.

Procurement frequently operates on a parallel track, disconnected from innovation and clinical evaluation processes. This separation represents missed opportunity as well as poor system value: public resources are spent testing solutions that never progress to wider deployment, despite demonstrating improvements in efficiency, cost, quality or patient outcomes.

International experience

International experience shows that procurement can be designed differently. Across Europe, mechanisms such as Pre-Commercial Procurement and Public Procurement of Innovation enable public bodies to share risk with suppliers, test multiple solutions in parallel and act as early adopters in immature markets.

Crucially, these approaches are typically supported by ring-fenced funding, signalling that innovation is a strategic priority rather than an optional extra. Dedicated budgets also empower procurement teams to use functional specifications, lifecycle costing and outcomes-based evaluation, tools better suited to digital and service-based innovation.

Ireland’s healthcare system currently lacks an equivalent, system-wide innovation procurement framework. While policy rhetoric supports SME participation, risk aversion continues to shape purchasing behaviour, often defaulting to familiar incumbents.

Signs of change

Encouragingly, signs of change are emerging. One practical reform is the expanded use of Dynamic Purchasing Systems (DPS). Unlike traditional frameworks, a DPS remains open throughout its lifetime, allowing suppliers to join once they meet qualification criteria. For smaller vendors, this removes the ‘all or nothing’ nature of framework competitions and enables market entry when companies are operationally ready. For buyers, a DPS broadens the supplier base, strengthens competition and improves responsiveness to evolving clinical needs. Realising this potential on a larger scale, will require consistent implementation, streamlined onboarding, and clear alignment with digital solution categories.

More transformative still is Ireland’s transition to six Regional Health Authorities (RHAs). This structural reform represents a once in a generation opportunity to rethink how innovation is adopted and scaled. RHA’s budgetary authority coupled with procurement autonomy, provide a valuable function as natural scaling units – large enough to deliver system impact, yet sufficiently close to frontline clinical reality to support meaningful adoption and evaluation.

At a practical level, RHAs could enable region-wide pilots rather than isolated hospital trials, commissioning proof of concept with predefined criteria for expansion across all sites in the region once outcomes are achieved. Pooling demand and risk across a region, reduces the burden on individual organisations while generating stronger evidence to inform purchasing decisions.

Alignment between RHAs and DPS could further sustain open supplier ecosystems, allowing innovative SMEs to enter regional markets as they mature rather than waiting years for new national frameworks. Critically, successful regional deployments could become stepping stones to national adoption. Shared contracts or coordinated framework arrangements would allow Ireland to move toward a ‘test once, deploy many’  model already visible in other health systems. For digital health innovators, this would transform Ireland from a difficult first customer into a credible launch market.

Procurement reform, however, is not solely a system challenge. Capability gaps exist on both sides of the market. SMEs often struggle to interpret tender language, compliance requirements and evaluation methodologies. While procurement teams may lack confidence assessing novel technologies with long-term, cross-organisational and data-driven benefits. Bridging this divide requires policy support and investment in skills, guidance and shared learning.

Reform urgency

The urgency of reform is growing. Ireland’s health system faces converging pressures: workforce shortages, population ageing, rising chronic disease and sustained fiscal constraint. Digital and medtech innovation is no longer optional infrastructure; it is central to system sustainability. Simultaneously, economic policy emphasises resilience, indigenous capability and reduced dependence on fragile global supply chains. Strengthening opportunities for domestic adoption is therefore not protectionism; it is strategic capacity building and can be done within procurement rules, as with many of our European counterparts.

Reforming healthcare procurement to enable fair SME participation does not require dismantling existing safeguards. Targeted adjustments could deliver substantial impact, with protected innovation budgets, proportionate financial thresholds for software, wider and more consistent use of DPS, clearer pathways from pilot to purchase, and stronger mutual understanding between buyers and suppliers.

Collectively, these changes would expand access for Irish innovators while improving the health system’s ability to adopt solutions that deliver better outcomes, lower long-term costs and improve patient experience.

The establishment of Regional Health Authorities creates a critical window to embed these reforms at scale, enabling region wide adoption pathways. RHAs could transform Ireland from a challenging first customer into a credible launch market for indigenous digital health and medtech solutions. Having invested and built a growing health technology powerhouse, Ireland must now ensure its own health system can benefit from it.

Link to article:https://www.pulseit.news/irish-digital-health/opinion-irelands-innovation-paradox/