July 30, 2025
Top 6 Ways To Help Your Practice Reduce Overhead Costs On Your Supply Purchases
- by Craig King, Director of PowerBuying
In today’s healthcare environment, it is important to realize savings in every area of your business to ensure that you are maximizing profit the best way possible. Below are some examples of the practices we use to realize those savings for our clients.
➤ WORK WITH AN OUTSIDE ADVISOR – We have found that working with an outside company to look over the supply purchases and act as a “watchdog” has produced lower and more competitive pricing. When companies know that their pricing is being reviewed/monitored by an outside company, it usually leads to a better overall pricing structure.
➤ CONNECT TO A GPO – Getting connected to a Group Purchasing Organization (GPO) is another way to help reduce your supply costs. GPO’s are a great tool to use to receive discounted pricing on the contracted items that the manufacturers have negotiated on your behalf. Around 20% – 40% of items can be on contract with a GPO and nothing changes in your purchasing pattern. You will simply benefit from the negotiated pricing on the exact same products.
➤ REVIEW PRICING OFTEN – We suggest that you review your pricing at least once annually by having a pricing audit performed on your behalf. This will ensure that your pricing is up to date and the contracts have not expired. These audits can also lead to other saving opportunities that were not available when the original pricing was loaded.
➤ SHOP AROUND – Price shopping with more than one company can also lead to more competitive and better overall pricing. Competition will almost always deliver better results for your purchases. It can also lead to a more extensive product offering that will give you other options. Having more than one company available to you should be another benefit to your supply purchasing.
➤ CONTROL INVENTORY – Inventory control can also lead to lowering your spending costs. Managing your inventory effectively helps improve purchasing decisions. Not understanding your current inventory can lead to unnecessary purchases and a crowded supply closet. Many distribution companies offer this service for free and can lead to more savings.
➤ PRIVATE LABEL – Finally, consider using private label products as a cost savings tool. Many times, a private label can offer up to 50% savings. As long as the quality is not affected, these private label items can offer you another savings opportunity.
By utilizing the steps above, we have found that your practice can benefit in reducing its overhead on supply purchases. Please contact DoctorsManagement to learn about these methods and more to help your practice get its supply cost under control.
