Archive September 2002 III, No. 9

Who Has the Purchasing Power at Your Facility?

Our survey finds that surgeons and managers both wield considerable influence, in the end joining forces to get the best buy.

Yasmine Iqbal, Contributing Editor


Want to take part in our next online survey? E-mail and we'll add you to our list.

While facility managers still consider surgeons their No. 1 customers, they make sure their voices are heard when it comes to buying capital equipment. Furthermore, both surgeons and administrators usually insist on hard evidence that the purchase will pay off. Those are a few indications from our latest survey on capital equipment buying habits.

Shared decisions
Our survey of 1,500 readers (150 responded) found that both surgeons and facility managers may be guilty of overstating their purchasing power. Consider that:
  • More than three-fourths (77%) of respondents agree that "the surgeons who operate in our facility have the most influence over the capital equipment we buy."
  • More than two-thirds (67%) of respondents agree that "the facility management team has the most influence on the capital equipment we buy."

How can this be? Well, perhaps the truth lies somewhere in the middle. The majority (71%) of our respondents agree that "capital equipment purchases are shared decisions, with surgeons and the facility management team holding relatively equal influence."

Most capital equipment purchases are made as a result of a surgeon's request, according to our respondents. Thirty-six percent say they have made more than 60 percent of equipment purchases primarily as a result of a surgeon's request; 38 percent say they have purchased 30 to 60 percent of equipment for this reason. Forty-two percent of respondents say they have accepted more than 60 percent of their surgeon's requests.

Some observe that the level of influence that a surgeon has is directly proportional to his case volume. "High-volume surgeons' requests tend to get purchased over low-volume surgeons'," says the manager for perioperative services for a Pennsylvania hospital.

Not surprisingly, in facilities where surgeons are owners, their desires usually reign supreme. "When surgeons request something, they usually get it," says the administrator of a physician-owned ASC in Casper, Wyo. Steven Gunderson, medical director of the Rockford ASC in Rockford, Ill., agrees. "Because there are a small number of surgeon investors in our center, we feel that it is important to keep them happy by making every effort to have the equipment that they prefer available."

Bargaining: Everyone's job
Just because surgeons may hold most of the cards doesn't mean that facilities aren't being cost conscious. Many respondents tell us that when surgeons own the facility, they don't have to be reminded to look out for the bottom line. Says Darlene Johnson, administrator of the Surgery Center of Cleveland in Cleveland, Tenn., "Our surgeons request high quality equipment, but are as cost-conscious as I am ... That's an advantage of surgeons being owners."

In some cases, physician owners can drive the hardest bargain. At the Center for Orthopedic Surgery, Inc., in Van Nuys, Calif., for example, the physician owners will "research the equipment and many times chase a better price down," according to Roxanne Baden, director of surgical services. An administrator at a 75 percent physician-owned ASC in Illinois finds that the best way to negotiate is to "have physicians actively threaten to take another vendor's product if we don't get the price we need."

The Purchasing Process