Medical institutions have an array of expenses. These expenses include costs such as staff salaries and third-party payments. Procurement of medical supplies constitute one of the significant expenses in a hospital’s Total Cost of Operations (TCO). Medical facilities cannot compromise on the quality of medical supplies because that has a direct and critical impact on patient care. Purchasing supplies at high costs can result in financial burdens for medical establishments and indirectly leads to high medical bills for patients.
In India, offline procurement systems are still predominantly in use. However, they have a lot of limitations which negatively affects healthcare facilities and patients.
In offline systems, customers (healthcare establishments) have finite channels for gaining product knowledge. Therefore, due to a lack of product knowledge customers are unable to make informed purchase decisions.
Offline procurement systems doesn’t allow customers to compare medical equipment and brands. As a result they have to contact numerous manufacturers for different requirements. Numerous vendors translate to multiple quotations. This makes the procurement process very complicated and time-consuming for hospitals. Medical establishments on most occasions purchase multiple items of various quantities and pricing. On an average, hospitals have more than 5000 stock keeping units (SKUs). Hence, it is more important for them to compare and contrast product specifications, prices and other aspects before making the final decision which must be in conformity with their allocated budget and in a timely, transparent manner to make the entire procurement process cost-effective and efficient.
Another significant limitation of the offline system is its geographical reach. In India, healthcare institutions especially in tier 2, 3 cities and remote locations still don’t receive a consistent supply of their essential supplies leading to a lot of stock-out situations and expensive short purchases from local markets.
A one-stop solution to all the above quandaries can be provided by an online procurement system. Such a system can make the entire procurement journey transparent, streamlined and time-bound. Various industries in India are gradually moving towards adopting technology in their operations. Both small and large businesses have understood one clear fact; that they have to reach and personalize themselves with their customers rather than waiting for the customers to reach them.
The medical industry similarly has also started to take a similar turn. One of the prime examples of this are organizations such as Medikabazaar, which has taken a big and pioneering step towards bridging the gap between manufacturers and hospitals by providing an online procurement solution.
Medikabazaar’s online platform for medical supplies provide customers with a powerful search engine where they can look for their essential supplies from a catalog of more than 100,000 products. After searching for their required equipment/consumables, they can compare their specifications, prices and other pivotal aspects. This allows hospitals to make informed purchase decisions in a transparent and convenient manner. This also minimizes the chance for disproportionate expenditures which can result in reducing their OPEX by 30%. The customer gets the advantage of Medikabazaar’s large scale negotiating power with its vendors who sell via the platform. The vendors also pass on better prices for supplies to Medikabazaar as they receive their payments upfront unlike other scenarios where their payments are usually delayed by 90 days. The company’s efficient and accurate last mile delivery system cuts across geographical boundaries and connects healthcare facilities in far-flung locations of India which adds consistency to an otherwise fragmented and unreliable medical supply chain systems in such regions.
One of the most important aspects of Medikabazaar’s online marketplace is that there is a transparent and clear line of communication with the customer. As all medical requirements can be accessed on a single online platform, hospitals don’t have to deal with multiple vendors and quotations. Customers can make purchases and payments on a secure online portal making their whole procurement process highly efficient. Such a process cuts out the middlemen who often take advantage of medical establishments.
At times, healthcare institutions (especially which have financial constraints) are unable to pay their entire amount at once. Medikabazaar’s flexible finance options which includes rolling credit limit and zero-cost EMI facilities makes it easier for such medical establishments to procure quality medical supplies without financial constraint challenges. Medikabazaar, with the above-mentioned services is tirelessly working towards making healthcare service more accessible and affordable across India. Medikabazaar is also helping medical centers associated with the Ayushman Bharat scheme to improve their bottom-line regardless of low reimbursements through their efficient supply chain solutions.
Technology, if integrated effectively within healthcare, can result in highly positive ramifications for the Indian healthcare industry. There are huge possibilities for the future. The only important aspect is that, every opportunity must be taken to turn those possibilities into a reality.
The article was published in the November 2018 edition of Medgate Today