Happy New Year! If gifts, poor lead volume through the holidays, a vacation to the Caribbean, or that brand new Coolsculpting machine have you feeling financially depleted, this newsletter is written for you. Sure, we could give you tips on how to turn that new Coolsculpting machine into a money maker, balance your cost & profit centers, and suck some of the fat out of your budget, but for a quick and painless way to boost your bank account, look at one area of your budget that’s likely been springing a leak for a while — your medical supply and pharmaceutical ordering. Read on to take the red pill and learn about our tried-and-true suggestion for slashing the cost of supplies, while still retaining quality…
Commodities – Medical Supplies and Pharmaceuticals
Most practices have been using the same multi-billion dollar companies for pharmaceutical and supply ordering for years. If you have been listening to our sage advice, you are already doing an annual vendor review to negotiate pricing for everything from paper towels to stitches. As each company has essentially fungible product lines, most practices order based on best pricing or quality of service. As these companies are largely rep-based and rep-driven, they can only differentiate based on relationship and service as they can rarely win on price. It is important to realize their price tags not only include the tangible products, but also the privilege of paying a portion of the rep’s salary among other costs such as marketing, lawsuits, and more. Do you hear that? That’s the sound of money trickling out of your wallet for a commodity you can purchase elsewhere for less.
But What if I do Like My Medical Supply Rep or Company
We do not feel these companies are bad, and we even feel they offer some benefits. Many have user-friendly ordering systems, (typically free) overnight delivery, and importantly, a wide selection of legal, safe products. Many representatives are hardworking and provide warm fuzzy feelings and a cell phone number for emergencies. To boot, they at first seemingly offer unbeatable pricing on key items you often order. If those benefits, in aggregate in your mind, justify paying 10% to over 70% more for the same products then continue on your current path. We have a gas station that charges around $1 extra per gallon in exchange for the “full service” option of them pumping your gas. We pump our own to save $15 per fill up, or around 25% so when we look at our clients spending $10,000 to over $1 million per year on medical supplies and pharmaceuticals, the decision seems clear in our eyes.
When it comes to pricing, what practices overlook is that while there are “low-cost loss leaders” being offered, other prices are much higher and often continue to rise with time, often by over 100% to make up for cost-savings on those few key items. To stay on top of pricing you may find yourself or your staff constantly checking multiple sources – spending tons of money on man hours and losing sanity comparing prices. What happens when you show your supply company rep the cheaper pricing you have found? They will likely find a way to offer lower pricing on those key items, but you may not notice other products going up to make up for the discount. Their ability to alter pricing also begs the question, what other products are you being overcharged for? And when will those discounts end and the higher pricing begin? And if better pricing was available, why didn’t they offer it to you already if you are such great friends with your rep? You may say to yourself, “this is the industry and I just need to grin and bear it because there are no other options, right?” You would be wrong!
You Get Great Prices, and You Great Prices. Everyone Gets Great Prices on Medical Supply Ordering!
There are different ways to lower the amount you spend on pharmaceuticals and supplies without wasting more precious time scouring the internet or juggling rep discounts for bargains. There are many GPOs and similar concepts out there offering varying benefits and downsides. Our team here at YellowTelescope, after vetting a good number of options, have selected a partner who has shown some great results.
They offer (largely free) overnight shipping, access to hundreds of thousands of products ranging from medical supplies to janitorial needs to pharmaceuticals to all you need to open an operating room, including high-end brand names as well as generic options. One thing we felt was important and lacking with most companies we interviewed is transparency. Our Preferred Vendors use absolutely no price manipulation, meaning you never have to worry if you are getting the best possible pricing as every practice ordering is quoted the same amount on every product. This saves you hourly wages spent comparing prices. Further, our finders fees do not get paid out of your pricing so this is a truly free service to your practice. And perhaps most importantly, the average client we have introduced for now more than 5 years, has saved 10-70% off the cost of supplies they are already ordering. With an average office spending $10k to $200k a year on their supplies, that comes out to $1k to over $100k or more in annual savings, forever. But what about that nice guy in a suit who brings doughnuts every other week? Well, you won’t be paying for his salary or for the doughnuts, but you will receive a dedicated customer service member, an easy online portal, and a one-stop shop for everything from binders to bandages to Bactroban.
Don’t believe you are stuck without options. YellowTelescope is known for consulting, sales and management training, and staffing. However, we also work year round to holistically help our clients and loyal followership save money, just as they grow revenue, as both lead to great profits. Reach out to us at firstname.lastname@example.org or 305-455-0720 today for more information on our services or medical supply savings.