With regard to the increased complexity of healthcare procurement and the importance of sound supply chain control for ensuring a truly patient-centered approach, experts keep calling the hospitals to introduce advanced technologies for effective management of healthcare procurement and supplies.
Procurement portals, as one of those, already greatly add to the effectiveness of purchasing across various retail and manufacturing companies allowing for simplified and optimized management of purchasing activities and relationships with vendors. Let’s take a closer look at the purpose of a procurement portal in the healthcare industry to understand the relevant benefits and point possible bottlenecks to be ready for.
The Calls to Build A Procurement Portal
Starting with the good side, let’s first see how a procurement portal can help to confront some of the common challenges in healthcare procurement.
# 1. Compliance with multiple healthcare rules and regulations
One can hardly overestimate the pressure of legal and ethical regulations healthcare providers have to deal with. With a portal, you have all info regarding any vendor centralized and organized, which makes it much easier to monitor their compliance with constantly evolving and changing requirements emanating from FDA or Medicare and appearing in HIPAA, HITECH, etc.
# 2. Higher requirements to order accuracy
As the procurement staff is not always deeply engaged in medical matters, they can make mistakes in orders, underestimate some requirements (for example, a doctor may have more confidence working with a particular brand of equipment) or overlook them simply preferring the best price offer. A portal allows clinicians, pharmacists and nurses to manage orders by themselves to get exactly what they need, while the portal’s workflows prevent them from violation of procurement rules and regulations of the establishment.
To add to the accuracy, the portal makes all procurement processes completely traceable. All order-relevant info is kept in one place, and you can see a full order history from the very beginning. This will facilitate, for example, the internal distribution of medications as the initial order traces back to the specific doctor and not someone from the procurement department.
# 3. Safety concerns
It may happen that a new version of a product or equipment won’t behave exactly as expected (e.g., as the previous version). Granting your non-procurement employees (doctors, nurses, etc.) direct access to suppliers via a procurement portal, you let them easily communicate their concerns directly to suppliers and get the issues timely resolved.
# 4. Unpredictable demand shifts
It’s often impossible to envisage and prepare for unexpected demand shifts in healthcare as in case of epidemic outbreaks (if they are not seasonal, of course). Your usual supplier may fail to satisfy the demand in full. However, with the diverse vendor community of a procurement portal, you can easily find new purchasing opportunities and meet the challenge thoroughly equipped.
# 5. Corruption problems
The corruption is worldwide and domain-wide. The health industry is where it can lead to truly dramatic consequences and go as far as cost lives because the medication and services of lower quality get supplied, for example. Keeping all procurement-related processes traceable, a portal can provide valuable detailed insights at any time and thus greatly reduce the chances for behind-the-scene manipulations.
# 6. Expiring patents
The expiring patent may signal different things to happen, for example:
– Various generic products may enter the market. New producers are likely to have lower prices as they rely on already known technologies, do not depend on a long approval process and don’t have to invest a lot in marketing activities.
– The product may disappear from the market completely as the original company stops the production and no generic products appear (as the manufacturing process is too complicated or expensive).
These changes will require different adjustments from the buyers, such as renegotiating contract terms with the existing supplier, looking for a new vendor to win a better bargain, deciding on product substitution (in case the production was stopped completely), etc. The portal alerts functionality keeps health providers fully informed about upcoming patent expirations and also gives quick access to an organized catalog of potential vendors, so you can timely plan all the needed arrangements.
Pain Points to Prepare For
Yet, the collective experience of healthcare providers indicates a number of problems with bringing procurement online.
# 1. Fewer chances to negotiate discounts
Personal interaction gives more chances to negotiate prices and get discounts. Thus, bringing procurement online to replace face-to-face interaction, you risk losing a good number of personal discounts. To mitigate the point, the advice can be to partially preserve the personal interactions with your key suppliers and those more willing to discuss prices (e.g., with whom you have long-running contracts, high-volume orders). The communication with the companies that tend to be more rigid in terms of prices (e.g., with whom you have single small-scale orders) can be safely brought into the online environment with instant message possibilities for urgent cases.
# 2. Troubles with the purchase of services
Many procurement processes of healthcare providers are connected with the purchase of services (from the maintenance of clinical and diagnostic equipment and marketing services to radiology services, pulmonology services, testing services, etc.). Usually, users complain that procurement portals are not the best suit for that. The reason is simply that their portals are just designed for the purchase of products only.
To handle buying of services efficiently, you need to customize the portal for this by introducing pricing models (T&M or fixed price), working hours input, ability to track the progress, support of extended collaboration (as more negotiations and clarifications will be on the way), etc.
In healthcare, e-procurement is not only good for getting better prices but also mitigates urgent challenges that the industry faces today. It allows healthcare providers to ensure increased order accuracy and improved concerns management; simplifies monitoring of vendors’ compliances and patent expirations.
And if you feel that a portal’s pain points (that in most cases can be easily mitigated) won’t affect the efficiency of your procurement process that much, e-procurement is well worth considering as the way to optimize your supply management and experience the benefits it brings.
About Boris Shiklo
Boris Shiklo, CTO at ScienceSoft, is responsible for the company’s long-term technological vision and innovation strategies. Under his supervision, the company’s development team has successfully fulfilled complex projects of over 80,000 man-hours in Healthcare, Banking & Finance, Retail, Telecommunications, Public Sector, and other domains. Boris Shiklo has a solid background in IT consulting, software development, project management, and strategic planning.