Discounts are elusive for most providers

To boot: Vendors are reducing payment terms, according to poll
Friday, August 16, 2013

YARMOUTH, Maine – When it comes to product pricing, competitive bidding has changed the playing field between select vendors and providers, according to the latest HME NewsPoll.

Only 37% percent of the 67 respondents to the poll reported getting discounts from vendors as a result of competitive bidding. Of those, the largest majority, 38%, reported getting discounts of 6% to 10%.

“Most have approached us with discounts, knowing that there are manufacturing competitors that are also knocking on our door,” one respondent commented. “We are pushing for national discounts.”

Another respondent said: “We’re seeing across-the-board cuts from every vendor to gain our business.”

The largest majority of respondents, 33%, reported getting discounts for mobility products.

Respondents reported that vendors are frequently tying discounts to volume and package purchases. They also report vendors are offering discounts only on certain products.

“The manufacturers are promoting less expensive ‘competitive bidding equipment,’ but our normal line has either stayed the same price or has increased a little,” said Brent Bradshaw, president of Durable Medical Equipment, Inc., in Austin, Texas.

Sixty-three percent of respondents, however, reported they’re not getting discounts from vendors. To boot: Some vendors are reducing their payment terms for products purchased, they say.

“We have always gotten good discounts and not much has changed with the advent of competitive bidding,” said Rick Perrotta, president of Network Medical Supply in Charlotte, N.C. “Although, one of our major vendors changed our billing terms from 90 days to 60 days. I suspect they want to limit their exposure to losses from companies going out of business.”

Another respondent reported a vendor reducing payment terms to 45 days.

One respondent reported that competitive bidding has resulted in more office visits and calls from vendors that offer lower-cost products.

“I have seen more of the ‘inexpensive manufacturers’ more often,” the respondent said.