Healthcare as a cost-consciousness business: Justified?

India is, by and large, a country with a ‘middle class’ mind-set. Cost saving is the primary goal in all transactions, and few would disagree with this statement. This mind-set has transferred to the healthcare sector as well.

However, the question that is worth asking is, is healthcare a field where cost-consciousness is justified? Of course, no one is saying that cost is to be ignored. That is simply not possible. And so cost-consciousness is to be exercised. However, if it is to be exercised, isn’t there a better way of doing it, without compromising on quality of service and infrastructure?

Surely an equilibrium can be struck between cost and quality. In this article, I am going to focus on two aspects: reasons why cost should not be the number one factor in the healthcare industry, and what available options can be utilized to strike a perfect cost-quality balance

So to start, here are 4 reasons why cost should not be the number one factor in the healthcare industry:

1. You are in the healthcare industry:

As they say, remember why you started. Healthcare industry is still considered one of the ‘noble professions’, and service is its motto at all levels and across all functions. It is just not expendable.

Unfortunately, many confine these traits to only doctors. Any individual directly related to the healthcare field would disagree. Purchase managers can manage hospital infrastructure that focusses solely on patient care, away from parameters such as costs and bottom-line. That would be their way of proving their commitment. You are not front-end, but you are an equal contributor

2. It’s ultimately going to cost you more:

Let’s switch from ethical talks to pragmatic observations. Bad patient care is going to cost you in the long run, especially in this relational business era where consumers do not simply accept what you offer. They understand, gauge, compare and experience different services until they hit upon that which they are satisfied with. And that might not be the most cost-effective place. Products with proven history, established brand names with clinical case studies are more suited to create brand image and attract patients. It’s a mutual benefit scenario. They need the cure, and you have a business to operate

 Also, it is not true that ‘cheaper’ purchases are more cost-effective. Rather, best-in-class equipment might prove to be the better options. It’s all about thinking long-term. You save the pennies, you lose the dollars.

3. Results matter:

Some cases are so severe, there are no second chances to treat them. There are an increasing number of cases today where patients are willing to spend voluntarily. Survival is the only thing that matters.

You have to have the infrastructure ready. Contingency planning is the term. With the number of new diseases detected today higher than ever before, hospitals can actually have a cost-advantage if they become the go-to place for a certain treatment, or better still, a group of treatments.

Many reputed hospitals have actually created market value through specialized service offerings. Reputation building in this era does not mean that a hospital cure common ailments; rather it is dependent upon its ability to cure uncommon complexities with security, assurance and accuracy of regular treatment. For this, it needs to have the entire range of medical equipment available at their disposal. These one-time investments are arguably just as important as doctors.

The right way to be cost-effective in modern times is this:

1. Value purchase: Bulk purchases of different equipment, made from a single point-of-contact are the new way of value procurement. Online B2B sites for medical supplies and equipment are revolutionising the way purchases are being made in the Indian market. Bundle all your supplies in one ‘value’ basket, and let them handle the rest of the procurement process.

Companies like Medikabazaar are leading the way with well-applied concepts like Value Procurement Organisation (VPO), a first-of-its-kind deal with the Association of Healthcare Providers India (AHPI)

Gain long-term cost benefits, minus the hassle2. Efficient Inventory Management: According to a survey done by Cardinal Health, one of the world’s leading online portals in healthcare supplies, 40 percent of surgeries are cancelled due to stockouts. Excess stock can reduce savings by up to 30 percent. Also, many last-minute unavoidable purchase scenarios crop, which, repeated over time, can result in unnecessary cost exertions. Efficient inventory management is one way to go to reduce costs. Intelligent inventory management systems like Vizi are paving the way for systematic and cost-effective stock-keeping.

CONCLUSION

You cannot do away with cost as a factor, neither can you ignore cost-saving as a factor, in the healthcare-business merger of things. The article covered 4 reasons why cost should not be the number one factor, skimming through a couple of ethically appealing and a couple of pragmatic factors. 

It further discussed how professionally managed, centralised, cost-effective procurement of medical devices and utilities from online B2B vendors, who cover hundreds of suppliers, manufacturers and distributors from multiple brands under one roof, is the modern way to go cost-effective, along with an enhanced and non-manual focus on inventory management.

Customer service is the new marketing, and the customer’s perception is a business’ reality. Businesses in the healthcare domain would do well to remember these points and put them in practice.