From this month’s Repertoire article, “Opportunity amidst Uncertainty”
Non-hospital distributors can expect some tough questions about pricing from hospital/IDN supply chain executives. They must be ready with answers, says Dave Rose, vice president, business development and corporate programs, National Distribution & Contracting, Nashville, Tenn. “It is our responsibility, as distributors, to educate the customer about the cost variances to serve different market segments. We need to explain, and more important, demonstrate, the different costs associated with serving a physician clinic vs. the hospital. It is not unusual for the independent distributor to drive 15 miles to drop off emergency equipment or supplies, in low unit of measure, to a physician office for a community event, such as a school sports program.
“Distributors will hear the need to reduce overall cost – not necessarily at the product level, but to improve efficiency and savings across the entire operation,” he continues. “They will hear that the customer will want to be an active participant in the process, who wants visibility and some control of the supply chain decisions and process. Large providers who buy physician practices will need the distributor to leverage GPO contracts and support contract compliance.” Distributors will need to be prepared to help their customer navigate GPO contracts, compliance and reporting issues.
What’s more, non-hospital distributors will need to leverage technology to provide cost-effective solutions that will give the IDN/supply chain team real-time visibility to both process and price, says Rose. “[Distributors] can expect to assist with common ordering platforms that allow customer input and control. The independent will position itself as a partner/consultant who can assist the hospital/IDN with product formularies and offer suggestions for reducing overall cost.”