HMEs shrink vendor partnerships

Wednesday, February 28, 2007

More than half of the 236 respondents to February's HME NewsPoll plan to consolidate their purchasing with fewer vendors in the coming year. Not surprisingly, they want the best of both worlds as they consider which manufacturers to work with: They want the highest possible quality at the lowest possible price.
While this demand is as old as commerce itself, the pressure for manufacturers to enhance quality and price at the same time has never been more urgent, at least in the HME industry.
Most suppliers say they'll consider the combination of quality, price, warranties, service and support as their primary drivers when selecting their primary manufacturers.
"We plan to balance product quality with total cost of acquisition (product cost, freight, lead time, ease of ordering, etc.) and net allowable from third-party payers," said Jeffrey Gasparini, vice president of Medical Department Stores in Venice, Fla.
Others, quite unabashedly, say they plan to consolidate purchasing with manufacturers who deliver the lowest price.
"It has come down to the three Cs: cost, cost and cost," said Jody Wright, president of Rocky Mountain Medical Equipment in Sheridan, Colo.
But for every supplier who ranks price first and foremost, another ranks product quality as the primary driver.
"While it is tempting to buy just off price alone, the old adage that you get what you pay for is alive and well in the HME industry," said Cliff Woolard of Home Med-Equip in Concord, Calif.
Some suppliers are toughening up demands for manufacturers, calling for more readily available inventory, online ordering, more political participation and contracts with buying groups.
Others threaten to abandon vendors who require "unreasonable" travel for training and those who entertain competitors.
"If I'm out making sales calls with a rep and I see him out making sales calls with my competitor the next week--at my referral source--he doesn't have my best interests in mind," said Bobby Logan, manager of Hub City Home Medical and Oxygen in Lubbock, Texas.