Many factors are essential to the practice of quality medicine and surgery including having an appropriate range of high-quality equipment for both diagnostics and treatment and the right medications, supplies, and food to use in-house or send home with clients. The process for purchasing and replenishing these items varies from practice to practice, and May’s Monthly Management Survey asks about that process.
No surprise, the practice owner (typically a veterinarian) makes the final decision in 75% of the purchases of medical equipment and about 55%-60% of computer hardware and software purchases. This makes sense due to the higher cost of equipment and the long-lasting impact of the decision on practice finances and medical care. The practice manager and practice team are more involved in the drugs, supplies, and food purchase decisions. Those respondents who answered “other” typically said that a combination of these team members were involved in the final decision or that others not listed here (associate DVMs, inventory manager, IT person, corporate office) were involved.
Peers are the most common initial go-to resource for all purchase categories, although practices use many resources to gather information before making a purchase. Resources listed in the “other” answers included company sales reps, VIN, VMG groups, VHMA boards, the Internet, corporate headquarters (if a corporately owned hospital), and the veterinarians in the practice. The almost unanimous resource for IT purchases was the practice’s IT consultant.
Purchases are made for different reasons, and it must first be understood what the goal of the acquisition is before gathering information and making a decision. Will the new equipment, supplies, food, or medications improve patient care? For example, the purchase of an ultrasound machine may allow for more accurate diagnoses. Will the new equipment lower the operating costs related to the provision of services? A new blood chemistry unit may lower the direct costs incurred in running a blood profile because less maintenance is required for the unit. Will the new equipment, food, or medications increase revenue? Or will it allow the practice to offer a more affordable diagnostic or treatment alternative? Often, more than one of these goals is met with the acquisition of a single piece of equipment or change in medication protocols. For example, an IV fluid pump will often reduce staff costs related to monitoring fluid administration as well as improve patient care by more accurately insuring patients receive the volume of fluids needed. Purchases aren’t usually made just to increase revenue; the revenue is a happy consequence of providing better patient care.
There is a broad range in how much financial authority managers have in purchasing. About 50% of the respondents can spend up to $1,500 without owner approval.
When asked: “What factors go into your decision making when you consider new products and services (rank the factors in order of priority)? The two factors that are ranked as 1 and 2 over 50% of the time are “User experience” and “Return on investment and value.” “Affordability” is included in the first three rankings 38% of the time and “Product support” and “Customer service” are included about 1/3 of the time.
For more details including tips on how to evaluate a new equipment purchase see the full report, VHMA’s Insiders’ Insight May 2019.
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