Distributors Help Providers Find Savings

Distributors Help Providers Find Savings

Hospitals and health systems are increasingly looking to their distributor partners to meet the challenge of lowering costs and improving the quality of care, according to HIDA’s 2018 Horizon Report: Health System Supply Chain Strategies. Drawing on a survey of 171 integrated delivery network executives, HIDA researchers found that the vast majority (88%) of these providers are satisfied with their distributor partners.

Hospital leaders report that one of the key values of distribution is that it can help reduce both direct and indirect costs. Three-quarters of these respondents say working with distributors reduces their need for real estate or inventory, 66% say it lowers their supply chain costs, and 55% say it reduces the need for capital investment.

HIDA’s research also revealed that providers encounter many hidden costs or obstacles when they purchase medical supplies directly from manufacturers. These include higher than expected charges for shipping, specific requirements for order levels and delivery, or special fees designed to discourage direct contact.

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Posted in: Cost Management, HIDA Resources, How distributors make a difference, Research & Analysis

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