Should You Buy Supplies Online?

For Robert Conner, the nursing director for a single-specialty urology ASC in Lake Charles, La., ordering basic supplies-gowns, gloves, tubing, IV solutions, and other sundries-used to be a mammoth task. "My staff and I spent an excessive amount of manhours on the phone-almost 15 to 20 hours per week-trying to track down sales representatives, compare prices, handle billing issues, and find back orders," he says. "As a small facility, we didn't have the advantages of being in a large purchasing group, which often prevented us from getting the best prices for supplies." Carolyn Sterling, a nurse manager at a freestanding endoscopy center in Everett, Wash., was in a similar fix: "None of the big vendors wanted to deal with us," she says. We had a terrible time even getting supply catalogs, let alone supplies."

That was months ago-since then, both Mr. Conner and Ms. Sterling have dramatically revamped the way they order supplies. Now, Mr. Conner's procurement process takes him all of about 10 minutes per week; Ms. Sterling has been able to slash her ordering costs by 20 to 30 percent. What's their secret? They both decided to take the leap into ordering their supplies online. It wasn't a completely smooth transition-Ms. Sterling says she was "dragged, kicking and screaming, into the computer age," but now that they've made the switch, ordering by phone or fax machine seems archaic.

Whether you purchase medical supplies for a single-specialty facility or a large hospital network, dozens of companies are clamoring to convince you that ordering online will save you time and money. Some of these companies are simply online marketplaces that provide access to a number of manufacturers and suppliers. Manufacturers and suppliers themselves are developing their own web sites, offering their customers an easier way to buy their products online. There are web sites that cater to smaller, freestanding ambulatory surgical centers and doctors' offices, offering them increased purchasing power and greater access to information. Others target large, established hospitals and hospital networks who already get the benefits of being in large purchasing groups-for them, ordering online may help to streamline and gain better control over the ordering process.

We talked to a number of companies and users to try to determine what the benefits are of ordering online and untangle the web of online options. Here's what we found.

A Wide Web of Options

All dot-coms are definitely not created equal. To try and make sense of the options, and determine which ones may fit your needs, we've divided them into four categories: Manufacturers, Resellers, Marketplaces, and Web Portals/Inventory Management Systems. It's important to keep in mind, however, that not all sites fit neatly into one category.

1 Manufacturers
If you're in a larger facility, chances are you're already buying supplies at a volume discount, and you may be purchasing from only one or two suppliers. It's quite possible that those companies may have developed their own web sites to help streamline the process for you. Two of note are cardinal.com and medline.com.

Cardinal.com is the web site of Cardinal Health Inc., a healthcare products and services firm that owns Allegiance Healthcare, which manufactures thousands of med-surg supplies. Through the cardinal.com web site (or through the Allegiance Healthcare web site at www.allegiance.net), customers who already have accounts with Allegiance can browse through the company's product catalog, find information on price and availability of products, and track orders. Cardinal.com customers can also buy pharmaceutical and laboratory products-more than 500,000 products in total are offered via the web site.

A similar site is medline.com. Medline is a manufacturer and distributor of more than 100,000 surgical products; medline.com allows customers with Medline accounts to access their product lines and manage their purchasing needs. Keep in mind that to access either cardinal.com and medline.com, you'll need to establish accounts with the parent companies by calling them or completing credit applications online; only after the application is accepted will you be allowed access to the site.

2. Resellers
If you're part of a smaller, independent ambulatory surgery center or physician's office, you may find it difficult to track down sales representatives and procure certain specialty items, and next to impossible to get the volume discounts available to larger facilities. Some online companies aim to solve this dilemma by creating virtual networks of smaller facilities and using their customers' combined purchasing power to obtain volume discounts. They then sell their inventory to their memberships at reduced prices. Three companies to consider:

Esurg.com
www.esurg.com

This company focuses on small to mid-sized ambulatory surgery centers and physician's offices. The company's main supplier is Allegiance Healthcare. If you cannot find the product you need among the 7,500 offered, the company's customer service staff can suggest alternatives or special order the product from another manufacturer, according to company president David Mayer, MD. The site also offers tools to help streamline and track purchasing functions, as well as daily news updates and specialty-specific information about the instruments, supplies, and pharmaceuticals it offers.

The ASC Network
www.theascnetwork.com

The ASC Network got its start as a Washington state-based niche distributor of endoscopy and gastroenterology products. It has since reinvented itself to be an online buying group targeted to ambulatory surgery centers of all specialties. Unlike esurg.com, it purchases products from a number of different suppliers. The company aims to create an online community for its membership, with news links, a member directory, and 14 specialty-specific message boards, according to president and co-founder Paul Nealon.

Millennium Surgical
www.surgicalnet.com

Millennium Surgical, which provides what it terms high-quality alternatives to brand-name products, attempts to provide users with one-on-one support as they search for the best prices on specialty surgical instruments, operating room equipment, sterilization trays, eye disposable products, and services such as flexible endoscope repair and diamond knife repair. Surgicalnet.com, the company's newly redesigned web site, provides vendor names and price comparisons on various products and services to provide a background on what's available. You then e-mail the company your facility's requirements. According to Millennium Surgical president Robert Edelstein, within 24 hours the company's staff will e-mail back a customized list with all the products that may fit your needs, from leading companies as well as smaller manufacturers, with corresponding price quotes. You can then order the items via the web site or e-mail. The company guarantees 20 to 50 percent savings on most items, according to Mr. Edelstein; surgeons can also evaluate the products for 30 days with no obligation.

3. Marketplaces
If your facility has a contract with a GPO, but you would still like to shop around to see if you may be able to get a better deal on some items, you may want to consider a web exchange. These companies do not buy inventory; instead, they act as online conduits between buyers and suppliers. They give users access to a wide variety of vendors and make it easier to shop for the best price in exchange for a small transaction fee (charged to the manufacturer or supplier). Here are three that may fit your needs.

Neoforma
www.neoforma.com

Neoforma offers three main services-an online marketplace that offers access to products from 2,500 different manufacturers, an auction where users can buy and sell used and refurbished equipment, and a resource center for users who are building new healthcare facilities. Any facility may purchase through neoforma.com, but the company specifically targets acute care hospitals and hospital networks; it wants to build customized online marketplaces to connect these customers to a variety of suppliers. The company recently signed an agreement with Novation, the largest healthcare GPO, which manages more than $15 billion in annual purchases for more than 2,000 healthcare organizations. Neoforma plans to introduce Novation's members to ordering online by developing an exclusive web marketplace called marketplace@neoforma. So far, 160 hospitals have committed to purchasing at least 50 percent of their annual purchases through the web site, selecting products from companies such as Owens & Minor and Boise Cascade.

Medibuy
www.medibuy.com

Medibuy features an online marketplace and an auction site. To guarantee security with the latter, it offers an in-house escrow service, which holds the payment until the buyer receives and accepts the merchandise from the seller. Medibuy.com also offers an "eSpecials" service where suppliers may post promotional or excess inventory at deep discounts. It also offers a request for proposals service. Users can submit RFPs for equipment and supplies; qualified suppliers respond with competing bids. The company has developed partnerships with two GPOs, Pre-miere and HCA, which together represent about 2,500 hospitals.

Surgicaltools
www.surgicaltools.com

Surgicaltools.com is both a supplier of its own private label handheld instruments and a conduit to seven other suppliers. It offers 30 different kinds of handheld instruments for 10 specialties, including ophthalmology, ENT, urology, and orthopedics. It claims to offer savings of up to 36 to 50 percent off of list prices, according to president and chief technology officer Alphonse Askterowicz. A recent addition to the web site is Supercross, an online database that allows users to match item numbers to instrument numbers of more than 140 manufacturers; if you need to replace an instrument, the Supercross database will show you a list of similar instruments that may fill the bill. The company plans to add a feature that will allow doctors to design their own instruments using a web-based computer-assisted drawing (CAD) program.

4. Web Portals and Inventory Management Systems
You may be satisfied with your existing supplier, but want a way to streamline your purchasing process. Or, you may want a more comprehensive on-site inventory management solution that helps you tie together the purchasing and inventory management activities of several different departments. Here are three companies who may be able to help.

Embion
www.embion.com

Embion aims to streamline procurement for the non-hospital market, including surgery centers and physicians' offices. You can arrange for your current suppliers to partner with Embion, which will work with the suppliers to create customized online catalogs for you. Embion also enables customers to order from multiple suppliers using one purchase order and track their orders online. The site provides tools to track purchasing information, which may help you better estimate your monthly supply needs and negotiate better purchasing contracts with your suppliers.

Suppleye.com
www.suppleye.com

If you perform a high volume of cataract cases, Suppleye.com may be able to help you to streamline your intraocular lens inventory. The company will provide you with a customized web browser and bar code scanner that will allow you to track, log, and restock your IOLs with ease, according to company president John Meek. Suppleye.com also helps you streamline both your purchase order and accounting systems by enabling you to order viscoelastics, phaco tubing, and other ophthalmic supplies from multiple manufacturers through the web site. You only have to fill out one purchase order; once the company receives it, it "unbundles" the order and sends its components to the appropriate suppliers. The suppliers send their invoices to suppleye.com, which creates a single invoice for your facility.

Buymedical.com
www.buymedical.com

Buymedical.com started as an online marketplace, and it still offers access to manufacturers and suppliers of med-surg supplies, as well as office supplies, janitorial supplies, linens, and other items. However, according to VP of sales Steve Britt, Buymedical.com is shifting its focus to provide inventory management systems to smaller healthcare providers. The company will come to your facility and install its Windows-based software on your network; the system provides a single interface through which you can order supplies from multiple companies and track usage of supplies by department, automatically replenish supplies, create requisitions, and interface with billing systems. The company plans to roll out a web-based system by early next year.

Please note that this is not a complete list of supply-related web sites, nor does it provide a comprehensive description of every cost or time-saving function that may be available to you via the web. E-commerce is rapidly changing, and chances are that in the next few years, you'll be able to do things over the Internet that you can't even dream of now. While you may never be able to treat patients online, the web may help you cut administrative time, enabling you to spend more time improving patient care.