Tech-driven India goes the extra mile in healthcare procurement

In India, the healthcare sector is witnessing the most technology disruption. The reason is that the healthcare ecosystem in India is the most complex due to multi-layered architecture that covers public or private hospitals, rural or urban locations, demographic divide, lifestyle, and other diseases, etc. This complexity brings in many challenges and also opens up opportunities to overcome them with the use of technology to enable a connected healthcare ecosystem.

In the past few years, technology in healthcare has touched almost all facets of life. The result is both doctors and patients are benefiting from such advanced medical technology and applications. Doctors are able to better diagnose, understand patient history and assess a patient’s medical needs and plan for proper treatment based on detailed medical insight. Technological advancement for better clinical outcomes and hospital management is at the center stage.

Talking from the standpoint of patients, technology has provided them access to healthcare facilities from the comfort of their homes. Online services ranging from telemedicine, booking doctor appointments online, home delivery of medicine, online electronic medical record repository to conducting technical, medical and rural eLearning sessions have brought about a revolution in terms of healthcare accessibility.

One such disruption which is helping to improve the bottom line of healthcare delivery is the adoption of online procurement of healthcare supplies. Hospitals and medical institutions have realized that it is not just capital cost, but the total operational cost (TCO), constituting from salaries of staff and doctors, medical supplies, to debt expenses and many more categories is also exceptionally high. Medical supplies in the form of daily consumables constitute the second largest cost in the hospital’s total operating expenses. Due to such high TCOs, the patients who are taking the services of such hospitals, end up paying high medical bills for the treatment and not everyone can afford it.

A country like India where more than 70% of the hospitals are private and medical expenses are still an out-of-pocket expenditure, making healthcare affordable for masses should be the focus of healthcare providers. Other burning challenges in the industry are doctor-patient ratio soaring to 1:1596 (WHO recommends 1:1000) and a huge disparity between healthcare accessibility in urban and rural India.

The idea of online procurement of medical supplies is gaining traction in the urban healthcare space but tier 2 & 3 cities, and remote areas are not able to leverage this. The need is to scale up new or existing healthcare providers in such locations for more adoption. Internet-based medical supplies procurement system is helping hospitals in urban India lower the total cost of ownership. It is also bridging these gaps in the ecosystem by connecting hospitals in tier 2 & 3 cities and remote locations to a bigger marketplace for procuring medical supplies.

Digital or Internet-based medical supplies procurement has the capability to make a radical shift from complex offline supply chain systems to an efficient and transparent online platform. The hospital gets access to the huge product catalog, brand choice, price range etc. This helps them to make informed decisions. Visibility into procurement status and purchase history helps to take quantity decisions based on data resulting in overall lower supply chain costs for hospitals. Online procurement also enables more efficient deliveries to hospitals in Tier 2 & 3 cities and remote locations in India which otherwise struggle to get doorstep delivery of regular medical consumables required by the hospital or end up paying a huge cost on procurement. This is unlike conventional business practice where even for a single product, numerous quotations are called from multiple vendors, rates are negotiated and even then the purchaser is not sure if he is getting the right product at the right price. And once it's negotiated it becomes an annual rate contract so even if prices decrease, benefits are not realized by the buyers. Geographically also, offline procurement systems are restricted while the Internet-based procurement system is global. This has led to a more equal distribution of healthcare throughout the country and not just in urban areas.

Being organized and direct in nature, online medical supply procurement platforms which are a bridge between manufacturers and hospitals also give added services to the hospitals such as specialized product consultations to evaluate and recommend products alongside purchase managers thereby saving a huge amount of time spent by physicians in helping hospitals procure the right medical products.

The primary concern of hospitals is quality healthcare delivery and that’s why they cannot compromise on salaries but can always bring in huge savings by blocking leakages like excess inventory, expiries, wrong purchases, etc. in the medical supplies space with the use of online procurement. Small savings under this head can bring down operating costs of the hospitals substantially and will be the driver for a value-based healthcare system.

The Indian healthcare industry underwent a growth of 18% from 2010-2016. During this phase, the industry size increased from $59 billion (2010) to $160 billion (2016). It is estimated that the industry will reach a size of $280 billion by 2020 financial year. Considering this, it is important that the majority of healthcare providers should adopt advancements in the medical supply procurement sector. This, in turn, will result in lower cost of operations for the hospital contributing to decreased medical expenditures and making healthcare more affordable for the patients.

Leave a Reply

Your email address will not be published. Required fields are marked *