ANNUAL CONFERENCE RECAP | 2018
Adding it All Up: Purchasing Strategies
to Empower the Buyer and Improve the
Bottom Line By: Sarah Daly
In all businesses, professions and industries, no matter how diverse,
there are two distinct players. There is the buyer and there is the seller.
Providers of Long Term Services and Supports (LTSS) are selling
the organization’s brand and services to reach a goal – 100 percent
occupancy or fantastic quality of services, or whatever goals have
been identified. However, providers are also the buyers. As providers
offer and sell their services to their communities, they are also buying
products and services that are integral to their day-to-day operations.
Long term care and senior living providers sometimes forget the
influence they have as a buyer of food supplies, clinical supplies, capital
equipment, etc. In one of the final sessions of the 2018 LeadingAge
New York Annual Conference, Chet Chandler, the director of strategic
accounts with Value First, did a deep dive review of purchasing
strategies and tools to empower those responsible for purchasing.
The goal of the buyer is to acquire products at the lowest cost possible.
The goal of a supplier is to sell products at the highest cost while
preserving the business. It is important to remember this relationship
in looking at a LTSS provider’s bottom line and looking for savings.
Strategies to grow the bottom line from a purchasing stand point
include group purchasing, benchmarking, aggregating spend, going
out to bid and laying out a savings plan. None of these tools would be
effective unless the provider recognizes their power as the buyer.
For example, in a bid process competing vendors place their bid for the
business. The vendor wants to show their quality of services and their
cost effectiveness. However, if a supplier does not think the provider/
buyer is serious about making a change in vendors for cost, the vendor
will not reveal the full potential for savings.
Something doesn’t add up… why don’t all providers realize the
influence that they have as a buyer? Chet believes that the strategies
shared in his session will empower LTSS providers and strengthen
their bottom line.
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Adviser a publication of LeadingAge New York | Summer 2018