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December 2011

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Purchase Strategies for Medical Equipment - Big shopping with a limited budget By : Sandip Chaudhuri

If you are new to healthcare, purchasing medical equipment would offer you the greatest thrill and challenge. This is because you either dont know what to expect or are over-advised on what to expect. The world is yours for you to buy when your angel investor has given you the Carte blanche to get the very best. However, when you have a limited budget and the promoter is breathing down your neck, or worse, you have cobbled together just about enough to buy the par-for-the-course equipment, then its a different matter altogether. This article is intended to be a dummies guide on the simple tricks which you might employ to have some bargaining chips at the negotiation table. Supplier Scorecard The buying of medical equipment should ideally start when the physical infrastructure becomes ready to house them. Before you gear up for multiple sales calls and multiple buying advices, you should do some ground work of your own on the supplier landscape. This is not as difficult a task as it may seem. Assuming that your hospital is being constructed with the clinical departments and facilities of your choice, you just need a tentative department wise equipment plan to begin with. Since your budget is limited, there is not much you can wish for in terms of new imported equipment. However, that doesnt mean that you cant have a single foreign label in your shopping basket. The US Dept. of Commerce had prepared a dossier on the Import Regulations of Pre-Owned (used and refurbished) in different countries of the world. The 2006 report intended as an advisory for US firms notes that for India There are no restrictions on import of used/refurbished medical equipment. Used/refurbished medical equipment is imported under the same category as the new products. Given the limited proficiency we have in the manufacture of high technology products, India continues to be a happy hunting ground for the exporters of pre-owned equipment. Your balanced scorecard should rank suppliers in the preferential order of reputed indigenous manufactures with efficient service/dealer network followed by reputed importing agencies (of pre-owned equipment) with full service back-up capabilities. You can actually turn to your son/ daughter or somebody suitably young to do the surfing, screening and compilation of data (as a summer research assignment perhaps!). Once they are over with the slog, you can use your maturity and judgment to scrutinize the value proposition of each. Street Smart Ground Rules You started off with the departmental procurement plan, the list of the broad category of equipment and now you have a supplier scorecard. If you are all on your own which is usually the case with small projects and limited budgets you have to don the dual hats of a technical officer and that of a commercial officer. The following step-by step purchase strategy would allow you to make the most of your limited budget:
1. Invite quotations from your short listed list of suppliers. However, you cant altogether avoid the unsolicited supplier proposals coming through. You can use

2. 3. 4. 5. 6.

the doggedness of the latter group to your advantage by learning the drawbacks and limitations of others/ usual pitfalls of the product segment. You might let them educate you on the regulatory and statutory norms, the installation paraphernalia of the product including electrical and civil requirements and the safety issues. They may be further useful in outlining the quality parameters/benchmarks for you. If they do a good job of tutoring and guiding you, then they would come into the purchase reckoning as a friend in need. Always ask for the user list and performance certificates (with contact numbers). The true test of capital equipment is the uptime record it shows during its life span. Its important to be especially careful with the selection of life-saving and emergency equipment (these are ones where the temptation of attractive price points must be avoided at all costs). Dont fail to clarify the omissions in specifications/exclusions in warranty terms (if you are able to spot any) before signing the purchase order/a binding contract agreement. Always insist on a gradually increasing staggered payment plan wherever possible, with the final installment scheduled after the successful installation of the equipment. Proprietary and relatively new technology would shift the balance of power firmly in favour of the manufacturer. If the purchase of such products become necessary, then it would be useful to enter into extended warranty agreements at the pre-purchase negotiation stage itself.

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7. If your final selection of equipment all turn out to be time-tested regular products, then you would also have the option of third-party outsourcing of the

maintenance and upkeep of your medical devices at the end of the warranty periods.
8. It makes sense to go with a supplier with a credible record of prompt service instead of a dirt-cheap Chinese import from a fly-by-night operator. 9. And finally, dont burn bridges with the supplier clan (even with the ones who have to miss out) you would need them in the near future, maybe sooner than

you think! Keeping the Faith Now that you are forewarned and forearmed, keep faith in your own ability to make every rupee of your budget count. This phase of learning will also serve you well when you repurchase/replace your old medical equipment. The best part is you can look forward to definite savings in future without letting vested interests colour your judgment.

The author is Manager-Business Development & Corporate Communications, Genesis Hospital Kolkata. He can be reached at sandiffthin@gmail.com

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