It’s no secret that hospitals and health systems are turning to technology to create and maintain operational and financial excellence. Put simply, they had to. Multi-million-dollar capital budgets and procurement processes are better served in smart, scalable software than they are in Excel and paper files. While the industry survived with archaic means for many years, the effects of COVID and the financial and labor pressures since, have accelerated the need for intelligent and scalable software solutions (Bain & Company).
While reimagining healthcare equipment purchasing is undoubtedly a collaborative assignment between hospitals and their trading partners, the foundation begins with reengineering buy-side tools, strategies, and execution. Believe it or not, but OpenMarkets has spent years researching and testing that hypothesis and it’s fundamentally accurate on nearly every level. Suppliers cannot achieve their desired (or reimagined) sell-side advancements without specific buy-side improvements to the way in which hospitals research, plan, budget and purchase equipment.
- Ever considered why ‘Group Buys’ are driven by suppliers? It’s because most hospitals can’t tell you what they intend to buy (and from who), how many and when they intend to purchase.
- Ever considered why quotes, collateral and communications get lost? It’s because most hospitals rely on fragmented communication channels to collect information from their supplier partners.
- Ever considered why quarter and year end deals slow down after clinical and financial acceptance? It's because the sign-off process is a widely manual, paper-based process that lacks visibility and accountability.
Taken altogether, it’s easy to legitimize the 51% sales, general and administrative expenses associated with the healthcare capital equipment industry.It’s challenging and expensive to sell into such complicated and nonautomatic purchasing and financial functions. Despite the earnest and creative efforts of equipment suppliers to expedite sales, salespeople, data deficient ‘promotional’ pricing programs and grit can only do so much. Real and lasting change had to begin in the earliest of stages in the healthcare equipment purchasing journey. Below are three key digital sockets that create value for hospitals.
As hospitals adopt strategic and scalable equipment procurement solutions – financial and operational efficiencies soon follow. Here are a few to consider:
Early visibility into equipment needs, by line item: Our platform provides hospitals with early visibility into their equipment needs on a line-by-line basis. Enabling proactive planning and preparation, ensuring that the necessary equipment is available when needed, ultimately enhancing operational efficiency and patient care.
Aggregation and volume-based purchasing: Our platform facilitates aggregation and volume-based purchasing, allowing hospitals to leverage their collective buying power rather than purchasing on a one-off basis. By consolidating purchasing events, hospitals are driving cost savings through negotiated discounts, favorable pricing terms, and economies of scale, leading to more efficient procurement and optimized budgets.
Quote and supplier management: Our platform provides comprehensive tools for managing quotes and suppliers. Hospitals can easily request quotes, compare options, and select the most suitable suppliers based on factors such as price, quality, and delivery. This simplifies the supplier management process, ensuring efficient and effective decision-making.
Standardization and improved purchasing cycles: Our platform promotes standardization in equipment purchasing, helping hospitals streamline their procurement processes. By establishing consistent purchasing practices and leveraging an equipment formulary, hospitals can reduce the time and effort required for each purchasing cycle. This improves operational efficiency, reduces administrative burden, and enhances overall productivity and rapport with your strategic suppliers.
Defragmentation of the secondary market: Our platform addresses the challenges associated with the fragmented equipment secondary market. By connecting hospitals with trusted suppliers, we create a centralized Exchange that promotes transparency, reliability, and fair pricing. This helps hospitals access high-quality equipment at competitive prices, reducing the complexities and risks often associated with the secondary market.
Next time, we’ll look into the supplier sockets and the value-creation they support.