I was recently in a meeting with a hospital supply chain leader who was recounting the blow-by-blow of a multi-million dollar purchase of patient monitors. He explained his frustration with the process and how at the end of the negotiation, he was left with that “funny feeling” in his gut that he had likely paid too much and left money on the table. Sound familiar? Have you ever had the sinking feeling that you paid too much for something? It has happened to all of us at one time or another in both our personal and professional lives.
The conversation with my customer reminded me of something that happened on a recent family vacation in the Dominican Republic, which has several parallels to our work with hospital clients. My daughters went to the resort gift shop to get a ball that bounces off the water to use in the hotel pool. I gave them a $20 bill and sent them off to get the ball – assuming it would probably cost about $5. Armed with dad’s $20, they went to the gift shop and asked the shop owner how much the ball was, and he told them, “$20.” The girls quickly coughed up the $20 bill, took their ball and hightailed it back to the pool. When they got back, I asked how it went, and how much the ball had cost. Then I reminded them that we had negotiated the price of the other things we had purchased from the same shop. My older daughter exclaimed, “Dad is telling us we just got scammed!” I got a chuckle several months later when I saw the same ball on display at Walmart for $3.99.
I realize that my daughters aren’t as concerned about spending my money as our hospital clients are about managing their budgets, but this anecdote reminded me that the uncomfortable feeling of being unsure about whether you overpaid for something is more than just something that impacts us in our personal lives, but can also have very real negative effects in our professional lives as well. In fact, we regularly hear from our hospital clients about some of the “pit-in-their-stomach” feelings, and the dissonance they experience when making decisions or negotiating the purchase of medical equipment. Some of the most common worries we hear are: “was the equipment supplier truthful with me?” “will my boss think I did a bad job?” “am I not being a good steward of the hospital’s limited financial resources?” and ultimately, “how do I know if I paid the right price?”
Beyond the unpleasant feeling in the pit of one’s stomach, uncertain or uninformed decision making can lead to serious mental anxiety – or “cognitive dissonance” particularly if you suspect, or even know that you could have paid less. It can erode your confidence on future assignments, negatively impact morale or even worse – damage your professional reputation. In our work, the complexity of capital equipment purchasing and lack of reliable pricing data make it difficult for hospitals to know if they paid the right price. But there is good news: there are some easy ways to overcome the risk of that “pit-in-the-stomach” feeling. Starting with having the right information is a great way to mitigate uncertainty and steer your team toward making well-informed decisions.
Stay tuned for our next post explaining what you can do to avoid that “pit-in-the stomach” feeling. We’ll share some insights on how to be sure you are using the right information – particularly when it comes to navigating the uncertainty of capital equipment purchases.