Of barriers and bridges: Buyer-supplier relationships in health care

Abstract

Background: As the second largest expense category after labor, supply expense has received more strategic attention in recent years. Collaborative buyer-supplier relationships play a significant role in strategic supply chain management. In the health sector, however, buyer-supplier relationships are generally perceived as adversarial and distrusting.

Purpose: The aim of this study was to investigate the major buyer-supplier relationship barriers, with an emphasis on the role of the physician as a surrogate buyer in the hospital's procurement process.

Methodology: Semistructured interviews were conducted with informants from six health systems and five medical device manufacturers in the United States. Additional data were gathered through a focus group consisting of 10 senior-level physicians. A structured qualitative analysis identified important themes in buyer-supplier relationship factors.

Results: From the data, four major themes emerged regarding the barriers to collaborative buyer-supplier relationships: lack of information sharing, opportunistic pricing behavior, changing regulations, and physician-supplier alliances. Further investigation regarding the role of the physician in purchasing reveals triadic implications.

Conclusions: The medical device market continues to exhibit strained buyer-supplier relationships. The physician's professional role in supply selection can undermine the hospital's strategic supply management efforts.

Practice implications: Both buyers and suppliers need to exhibit more information transparency in order to develop collaborative relationships with at least a small number of strategic partners. Supply chain executives at hospitals need to play a more active role in facilitating the link between the hospital's physicians and suppliers. Alternatively, hospitals can provide physicians with substitute services to curb supplier influences on physician preferences.