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Clarity and transparency — a clear need in the capital process

February 24, 2021
Business Affairs
From the January/February 2021 issue of HealthCare Business News magazine

Discounting transparency (DT)
DT metrics reflect fair, accurate, and actionable discounting for specified criteria, ideally with very limited additional time, effort, and resources required to get to a best and final price. Each capital quote should be qualified by the conditions or reasons a discount is offered by a supplier. A comparative price analysis based on comparable deals from the same vendor and model can identify additional discounting/savings from historical data.

This data, based on the same CT vendors, helps identify which vendors’ processes shorten the decision timeline with a viable offer sooner, with quotes showing little or no additional savings. By comparison, those that routinely issue low initial offers require extended discussions and negotiations that push clients into a deadline decision just to get the deal done. While the offer-negotiate-offer-negotiate game will likely not disappear, supply chains can drive change requiring real, competitive quoting from the start.

For the same CT market, only 43% of the quotes show a true best and final offer, 37% still show that discounting up to 10% can be negotiated, 14% show an 11%–15% increase in discounting should be negotiated, 4% show up to 20% still available, and 2% reflect that savings of more than 20% are still available. Even if you consider that the lowest 6% are not intended to be real offers and are likely more for budgeting, that leaves almost 60% that still require additional work, negotiation, communication, and discussion. This extends the buying cycle for vendors, and results in ever-mounting work for supply chain staff.

Tom Watson
Requiring vendors to offer quote and discount transparency is a win-win strategy
The QT and DT data analytics evaluate the level of transparency and quality in quote formatting, reflecting quoted practices by a vendor. This translates into smoother supply chain evaluation, assessment, negotiation, and purchase order process. It saves your organization time, staffing resources, and money, including capital costs and operational costs in supply chain resources, maximizing efficiency. QT and DT provide guidance for vendor quote submission. These should become part of capital value analysis best practice. Your organization will be able to purchase the right technology from the right vendor and at the right price, with efficient use of resources, time, and capital funding.

About the author: Tom Watson is a senior clinical advisor with TractManager Inc, a Symplr company.
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