MD Buyline sends out a
newsletter called Intelligence Briefings that has some great original
content (in addition to many of the newsy things you've already seen on
this site). What follows is a short piece by Scott Everett on pricing.
Buyline members send in for analysis and every day I am more amazed at
the lack of information that vendors are providing you, the
customer. Some informatics quotes come in with only a final
overall price; they don't even give a description of what is included
in that pricing. Would you buy a Ford Mustang for $20,000 without
information such as the year, coupe or convertible, mileage, type of
engine, etc.? Of course you wouldn't. So why would a
hospital take a quote from a vendor that just says "Laboratory
Information System: $200,000"?
Some vendors are very generous and break the quote out into categories
such as hardware, software, third-party software, and professional
services but once again don't list what line items comprise that
price. Other vendors go as far as to separate the categories and
list the individual line items and give a price for each line
item. The question then becomes is this price a list price or
just a sell price that they've given your facility?
Often when we receive a quote from a customer that does not include a list price we place comments in the bottom line such as:
"This proposal quotes prices for each component but does not indicate
the relation of these prices to the vendor's standard list
prices. Without a list price comparison your facility is unable
to determine what degree of discount, if any, is being offered for the
"We highly recommend negotiating for a revised quote proposal that
includes both your quoted price as well as the list price for each
item. At the very minimum, we would expect to see an overall
discount amount applied to each package to help your facility negotiate
what kind of savings the vendor is willing to offer. Currently,
this contract does not highlight any savings as an incentive to
purchase from this vendor."
Often after the hospital calls the vendor and requests list pricing
they are told that the quote that they have received is "custom" and
that "there isn't any list pricing." The simple truth is that
every quote that a vendor proposes is custom and this is not just in
the area of informatics. After I met with several vendors this
month they admitted they have list pricing. This is obvious; the
sales person isn't simply pulling a number out of thin air and slapping
it down on your quote. Every line item is quoted and based on a
list price. Any vendor who tells you "there isn't a list price"
is not being forthright with you. This is not acceptable.
Pyxis sets a standard for how customers should be given a quotation. Their quotes include the following:
Product Number / Product Name / Quantity
/ List Purchase Price / Discounts / Net
Price / Extended Price
With this information available the vendor can't really hide
anything. This makes it very easy for everyone reviewing the
Always remember that you are the buyer, you have the power. If
the vendor is trying to play games and hide information such as the
list price you should ask, "Is this really a company we want to do
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