Saturday, September 27, 2014

Researching New Purchases for the Medical Practice: Use the Exhibit Hall

specialty conferences
For many doctors and practice administrators, the autumn is the time to attend annual specialty conferences and to do research for major business purchases. A carefully planned visit to the exhibit hall, and spending quality time speaking with industry reps will payoff in huge returns once you return to the office. Take the time, however, to prepare ahead of time. This shows you are a serious buyer and you won’t be “sold” so easily.


Major Business Purchases

Managers and owners who face major purchases—like computer systems, medical equipment or a new office building—must take control of the process from the beginning. If you start entertaining vendor reps and reviewing slick promotional literature without doing your homework, you risk falling victim to high-dollar impulse buying. Have a framework in place, and you’ll also be ready to act and follow-up once you get back to the office.
In the business “big leagues” they refer to the purchase-planning end product as a request for a proposal (RFP). Those particularly enamored of formal processes and three-letter acronyms (TLAs) have an intermediate step, too: a request for information (RFI). Smaller and mid-sized physician practices, however, don’t usually spend the time and effort to assemble and submit RFPs. And while that doesn’t necessarily lead to disaster—or even significant dissatisfaction—it should leave you wondering, “Did we get exactly what we wanted and needed at the best price?”

If you want to be able to answer that question, you’ll have to ask it before you start listening to sales pitches and demos. (Otherwise, it’s like the Cheshire Cat’s response to Alice’s request for directions. She didn’t care much where she ended up, so he said, “It doesn't matter which way you go.”) And the questions to ask beforehand include: What do we need and why? How soon do we need it? and What can we afford? The answers to those questions form the heart of an RFP.

Don’t blanche at the idea—you need not produce a book-sized RFP full of technical specifications and professional-looking flow charts. All you need, really, is a clear description of the issues you’re trying to address, and what you expect from the vendors who will respond to your request. An RFP that will get the job done should include these seven components:

Practice Overview. Describe the size and scope of your practice including the number of physicians and other providers, their specialties, practice locations, staff size, patient volume and other data that will have either a direct or indirect impact on your purchase decision.

SWOT Analysis. Describe the practice’s Strengths, Weaknesses, Opportunities and Threats as they relate to the purchase under consideration. You can include the practice’s general market position and its overall goals and objectives, but focus on the proposed purchase.
  1. Key Issues. Describe your current situation in objective, critical terms. Tell exactly what’s wrong and what’s right with your current systems, operations, facilities, staffing and/or any area of concern that your purchase is anticipated to address.
  2. Purchase Description. Describe what you think you want in the product or service you’re considering. The more thoroughly you’ve done your research, the better you’ll understand your options and the more detail you can include in your description. The greater your detail, the more accurate your vendors’ responses will be.
  3. Requirements and Deal-Breakers. List for the vendors those features you consider “must-haves.” Again, you’ll have to do your homework in order to put together an accurate and thorough list. Try to prioritize the requirements—listing the absolute deal-breakers first. It helps the vendors further understand your needs and requirements.
  4. Vendor Requirements. Insist that the vendors include information about their companies and their approaches to implementation:
    • Company Profile—Information about the company, its ownership and history, market share and number of medical-practice clients already served by the product line under consideration.
    • Implementation Strategy—Timeline and description of client and vendor roles in the process and what support and training is included in the installation price.
    • References and Testimonials—List of clients similar to your practice. Look for practices of similar size, specialty and practice setting.
  5. Pricing. When comparing vendors, you’ll find that pricing philosophy varies a great deal. Therefore create a standard pricing guide that includes expense categories that make sense to you. Require each vendor to translate its pricing to fit in your matrix to make it easier to compare one company to the next.
Task Force Assignments

To create an effective (if less-than-formal) RFP, start by selecting a team to come up with the data needed for the request. The purchase under consideration will determine the size and scope of your task force. If you’re looking at copier/printer solutions for the practice, you probably don’t need physicians on the committee. If you’re shopping for a new in-office hematology analyzer, you don’t need an insurance biller in the workgroup.

Make sure the committee understands its roles and your goals. Give them the tools they need to gather information and finalize a list of vendors to receive an RFP. And by all means, provide them with a deadline—including time “milestones” for large, complicated projects. Monitor their progress, and be ready to provide plenty of “hand-holding” for less experienced participants. This will not only improve your chances for an effective RFP, it will also provide the mentoring and training for these same workers to serve in similar projects in the future.

So, put together your target list for business purchases and get planning! Using industry reps at your annual trade show is your secret weapon for making good purchases for your medical practice.