Healthcare and Life Sciences

Medical-Surgical Supply Spending Trends

Arcus surveyed 55 senior executives in the healthcare sector in May, 2011 to identify best practices in containing spending.

Healthcare providers are focused on reducing their medical device and surgical supply costs as they face diminishing budgets and cost constraints. A key focus for cost optimization is healthcare technology. The area has become one of the fastest-growing operating expense items for healthcare providers. These organizations are looking for increased visibility to help them with reporting requirements for their quality of care delivery strategies and related costs.

The survey indicates that healthcare providers can save up to $35 per order by migrating to  purchasing electronically with their vendors. The savings are significant as electronic purchasing increases the visibility of specifications and forces standardization of tender responses. In addition, automating the procurement process across the continuum of operations- from contract to payment can deliver superior efficiencies with more structured operations.

The third area that was mentioned often was consolidating of purchasing in a central location to increase negotiation flexibility with bulk buying. Supplying clinical and financial IT systems with real time data was a high priority for respondents. A key challenge today is a lack of visibility into spending across the value chain. A better understanding of service costs which often are not a key focus in the total cost of ownership of the supply chain needs to be more frequent accounted for.

Linking health outcomes to the financial implications of procurement, reimbursement and logistics are increasingly a priority for healthcare providers. They want to see more visibility in their total cost of ownership, operations and impact of products and services on the quality of patient care delivery.

Organizations are also adding more cost items into contracts for a range of non-clinical products. A key driver of lower costs is a stronger partnership with both clinical and financial representatives to ensure they work toward a common goal of cost containment. A higher level of collaboration with vendors can also result in increased value and a closer partnership.

 

A recent study found that high prescribing physicians receive three to five times as many calls from sales reps as they did 10 years ago. Today’s pharmaceutical rep is vying with a massive army of competitors for diminishing physician time. Many sales reps even have to compete with others from their own company.

 

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