Imagine you go to the grocery store and end up with a higher-than-expected checkout total. You go to review your receipt, but none of the items have prices listed. You ask the cashier to see which items are driving up your cost, and they decline and say it isn’t standard procedure. How frustrated would you be? You know you’re overpaying for something, but you don’t know what – so how are you supposed to save money? That’s exactly what hospitals deal with every day (but with much higher costs than the cost of groceries). Having to pay suppliers big bucks without an explanation of exactly what you’re paying for can be costly – to both your bottom line and to your sanity. Luckily, there’s a simple way around this problem.
Demand that quotes include line-item pricing (create a policy requiring it, if needed). Price transparency is critical for maximizing savings. Line-item pricing forces suppliers to “show their hand” and helps you see exactly what is being charged. That information also makes it much easier to submit a quote for benchmarking and compare included items on an apples-to-apples basis to maximize potential savings. And if suppliers are hesitant to provide that transparency on quotes, work with your team to make line-item pricing a standard hospital policy going forward. Remember that demanding line-item pricing from a rep is no more unreasonable than demanding an itemized receipt from a supermarket cashier. You can’t do your job properly without it!
A Miga client hospital was able to achieve 22% in savings on a recent quote for a cardiac imaging system from a top OEM. Their quote did not have line-item pricing, however, and the hospital was just given a big dollar amount at the bottom. Unsurprisingly, the lack of transparency in costs for the equipment, software, service, and accessories included made it incredibly difficult for the hospital to understand exactly what they were paying for. So they implemented a “new policy” that required line-item pricing from all supplier quotes. With just this one decision that took all of five minutes to create, the hospital had the leverage necessary to demand a more detailed quote and found that the features in the quote were being significantly under-discounted. With that information, they were able to negotiate additional discounts and remove unneeded items – amounting to an extra 22% of total savings savings.