At VIE Healthcare®, we like to approach things a little differently. One key area is looking at vendor strategies.
In most cases, we already know what their strategy is.
I recently got an email from a company that sells to vendors.
That letter advises vendors to create a plan to increase their margins to accommodate rising costs.
Any vendor increase is going to hurt hospital margins which are already under pressure.
One thing we do differently is learn about vendor strategies.
Our approach helps us to help our clients protect and increase their margins.
Vendors adopt advanced strategies and maximum resources to gain an advantage in contract negotiation.
Learning effective negotiation skills can help to dramatically improve your hospital’s operating margins.
Improving margins by 1-2% can make a difference to your profitability.
At VIE Healthcare®, we offer interactive vendor negotiation training to help your hospital find potential cost savings.
We also strongly recommend that hospitals analyze and discuss every line item detail during vendor negotiations.
Our standard recommendations during negotiations include:
- Avoid monthly minimums.
- We often find that hospitals pay for services that haven’t been carried out or are tied to an impossible volume guarantee structure.
- Do not allow prices to auto-renew.
- Auto-renewal is an essential part of your vendor negotiations.
- What many hospitals don’t realize is that agreements can be negotiated either in term or out of term.
We achieved $1,000,000 in cost savings for one health system by putting together a robust negotiation strategy.
When choosing to partner with a supplier or vendor we suggest the following steps:
- Determine the specific need.
- Benchmark to compare the services and prices of multiple vendors that can meet your specific hospital needs.
- Vet your top three vendors.
- Handle all contracts and vendor negotiations with care.
Reach out at [email protected] to discuss your cost savings goals and how we can support and accelerate cost savings opportunities in your organization.