Hospitals pay hundreds of millions too much for medical devices

By Marieke ten Katen | 27 August 2017

Hospitals spend hundreds of millions each year on purchasing medical devices. The Gupta consultancy comes to that conclusion after analyzing the sector. The researchers note that hospital administrators and buyers make insufficient efforts to pay the best price for implants, syringes, surgical instruments and other medical devices. They allow themselves to be seduced too much by sales pitch and the (complex) offers of the suppliers.

It is high time for hospitals to take a critical look at their procurement process, concludes Kees Isendoorn of Gupta. “Purchasing should be a top priority for the hospital because it makes up around 30% of the costs and there is a lot of potential to lower costs or get even better quality. But the subject is often insufficiently discussed at the board table. "

In the past ten years, hospital purchasing costs have doubled to around € 8 billion in 2016. But Gupta wonders in the report presented on Monday exactly what added value patients have received for this. The procurement process in hospitals has been criticized for some time. Certainly now that healthcare costs are coming under increasing pressure, the waste of healthcare funds is an important point of discussion. The CDA previously called it “a mystery” why hospitals and health insurers do not yet collectively purchase medical devices. Often it is large multinationals who sell the products and because of their market power they can charge high prices, according to a previous study by Gupta. The SP even argues for a national, central procurement of medical devices to tackle the ‘ridiculous profits’ in the sector.

Small department

According to Gupta, there are annually tens of millions per hospital to save on the purchase of medical devices. “Healthcare institutions are now clearly lagging behind suppliers,” says Isendoorn. “The procurement department is relatively small in many hospitals and little is invested in it.” For example, Gupta’s analysis shows that for every buyer at a hospital there are between 20 and 25 sales staff at the suppliers.

Isendoorn states that it is important to invest in the skills of the purchasing team within the hospital and, in addition, buyers should report the financial results directly to the board of directors. Also, purchases are often still on a small scale and so hospitals have to seek more cooperation with each other. “Purchasing really deserves a central place at the board table, where the conversation about the willingness to switch with the doctors must also take place,” says Isendoorn. “Of course, that change cannot happen suddenly, it has to be done step by step, but it certainly requires a critical attitude and courage.”

Invest in quality

Amstelland Hospital in Amstelveen is an example of a hospital that has substantially changed the purchasing process. By investing in, among other things, the competencies of the buyers and working more data-driven, the hospital managed to realize a saving of 18% in the purchase of IT, implants and medicines, among other things.

The Sint Maartens clinic in Nijmegen is also actively improving the procurement process. In 2015, the hospital even decided to outsource the purchase of part of the medical devices to the Mediq Medeco company. “As a hospital, we know how to provide care, but we never have the knowledge and skills to scan the world for the best products at the best price,” says Mark Van Houdenhoven, chairman of the board of directors. from the Maartens clinic. ‘A company like Mediq Medeco does. Why should we concern ourselves with that? " According to the Maartens clinic, the collaboration results in a saving of 10% on an annual basis.

Katen, Marieke ten. “Ziekenhuizen betalen honderden miljoenen te veel voor medische hulpmiddelen” Het Financieeele dagblad, 28 August 2017, pp 2. [pdf in dutch]