- CPS
5 Strategies For Cost-Effective Senior Living Healthcare Equipment Purchasing
Inflation continues to impact senior living providers, driving up the costs of labor, services and healthcare equipment. Senior living healthcare costs in general have been trending higher than inflation for many years, and while that trend may have flattened in recent months, the respite isn’t expected to last.
Senior living providers exist in a unique industry that is part hospitality, part healthcare. Successful providers understand that cost management is key to succeeding at both. Purchasing decisions like those of healthcare equipment aren’t just a one-and-done expense. Often, they come with ongoing overhead, such as the cost of repairs and employees to operate the equipment. These costs add up over time, especially without proper oversight.
There are, however, several strategies you can employ to make your healthcare equipment purchasing decisions more cost-effective.
1. Track and Analyze Costs and Spending Patterns
Understanding where and how money is being spent on healthcare equipment purchasing (and who is spending it) allows for more accurate financial forecasting. Conduct a thorough inventory of existing healthcare equipment and identify how often it’s being used. Departments may currently have a loose reign on their individual budgets. Ask teams to line item healthcare equipment purchases so they can be reviewed monthly against what you have in your inventory.
Analyzing these spending patterns will give you a firm understanding of where equipment purchases are being made. Are there opportunities to rent a piece of equipment instead of purchasing it? Is used equipment more cost-effective? This also allows you to track trends over time. Is there a healthcare equipment purchase that was cheaper or more expensive several months ago? Why? Where did it come from?
Getting a complete picture of the purchases you make to provide senior living healthcare can offer you these valuable insights, and many more. Armed with your data, you can call your group purchasing partner or vendor to discuss any discrepancies in pricing from item to item, which can be revealing.
2. Centralize Your Procurement Process
All senior living providers—but especially those with multiple locations—can benefit from software solutions that help streamline healthcare equipment purchasing and inventory management. Knowing how much you spend can also be a powerful bargaining chip, allowing better negotiations with suppliers or consolidating purchases to take advantage of volume discounts.
It’s also the easiest way to stay on top of how (or whether) inventory is being used. These greater insights can reduce duplicate or unnecessary purchases, and give you an idea of when to sell existing pieces of equipment that aren’t being used or that are being replaced.
In addition, centralizing procurement can allow you to leverage economies of scale by consolidating purchasing volume across multiple locations. This will put you in a better position to collaborate with suppliers on pricing, rentals and discounts.
3. Collaborate with Suppliers on Rentals and Discounts
Now that you have the knowledge of your purchasing inventory, history and needs, you can coordinate with other senior living providers to leverage group buying power. Purchasing equipment in bulk can lead to significant discounts. By pooling resources with others, you can negotiate better prices for everyone. This may also result in better service and support, and minimize your supply chain risks.
Consider renting healthcare equipment from reputable suppliers. Rented healthcare equipment is often significantly cheaper, and offers more flexibility should the equipment no longer be needed. Just be sure to verify that the equipment is certified for safety and functionality.
Some vendors and suppliers also offer discounts for prompt payment, or early invoice settlements. Also ask about flexible payment terms or installment options.
4. Equipment Purchases Should Support Business Strategy
Once you have an idea of what purchases are being made, you can begin to examine whether or not those purchases support your current business strategy. For instance, strategic equipment purchases can improve resident experiences by reducing waiting times or providing a higher level of care that leads to greater satisfaction and health outcomes. But purchases that aren’t being used, or that offer advanced features that do not support your business goals, are unnecessary.
If you’re looking to improve employee productivity and minimize labor costs, ask teams to demonstrate how their healthcare equipment purchases will help support and achieve your business goals. Well-planned equipment investments are vital to your success, but poor purchasing decisions can result in bloated budgets and overhead.5. Continuous Education Around Purchasing
Educating your employees about healthcare equipment purchasing procedures, needs, costs and usage is also key. Engage in open communication about how these procedures help you better serve residents and contain skyrocketing costs. By demonstrating the “why” behind a process, and inviting teams to be proactive in helping you manage those processes, you can prevent feelings that you are “micromanaging” purchasing.
Well-trained employees can also help identify issues with existing equipment early and prevent equipment misuse or damage. Damaged or malfunctioning equipment can also cause user safety concerns. To avoid this, encourage employees to report any equipment-related issues immediately. Addressing these early can help avoid expensive repairs or replacements.
Those who feel engaged in the process can also be a great resource for helping to identify health equipment purchases based on resident needs and usage patterns. Remember that your employees should be treated as an integral part of business. After all, no one knows your residents and their needs better than the team that interacts with them each day.