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4 Most Common Challenges in Procurement in Healthcare

Oct 30, 2018

Globally, the quality of health care services has improved a lot over the past few years. Today, the researchers have found solutions for many diseases that had no cure or could not be treated earlier. Such improvements in health care quality are primarily because of the immense growth in healthcare procurement processes that include segments like clinical research and medical equipment procurement. Despite the strong growth of the healthcare services industry, the suppliers in this sector are facing numerous procurement challenges. In this article, we have listed down some of those challenges that you must know if you are a healthcare organization. But before exploring those challenges, let’s understand a bit about procurement.Contact US

What is procurement?

Procurement is the process of selecting vendors, strategic vetting, establishing payment terms, selection, contracts negotiation, and final purchasing of goods. Procurement deals with acquiring all the goods, services, and work that is important to an organization. Proper procurement management is important because if it’s not done properly, an organization can end up spending well over half of its revenue on purchasing goods and services.

Challenges in healthcare procurement

Provider preference items result in higher health care costs

Many healthcare organizations employ a provider request system method or preference card for managing their procurement. However, basing inventory on provider preferences can result in significant request proposalvariation in cost and this can be a major challenge to cater.

Limited control in price

Healthcare organizations oftentimes cannot access procurement data to develop actionable steps to boost efficiency. The lack of health IT to identify and analyze procurement data can lead to a lot of wasteful spending. In response to healthcare procurement challenges, more provider organizations are looking to implement health IT systems that can better manage procurement costs under value-based reimbursement models. Many value-based reimbursement models require healthcare organizations to accurately measure and compare healthcare costs with the outcomes of the patient.

Healthcare procurement involves many hidden costsDemo

The core of healthcare procurement spending is the cost of the product, but healthcare organizations should be aware of invisible costs associated with the procurement, such as inventory holding and distribution expenses. Understanding the costs behind utilization, internal distribution, inventory holding, and special deliveries will not only yield savings but will also enhance clinician and patient satisfaction.

Medical equipment procurement

Generally, medical equipment is produced in high volumes with standard specifications. However, customization in specifications to meet the specific needs increases the medical equipment procurement cost. The manufacture of such specific products may result in errors as the companies struggle to meet the demands of the end users within the stipulated time frame.


To know more about healthcare procurement and medical equipment procurement

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