Integrated and Efficient Procurement Systems in Demand for U.S. Hospitals, According to IDC

FRAMINGHAM, MA – DECEMBER 11, 2002 – Demand for highly integrated healthcare procurement systems is high, spurring the adoption of a new generation of supplier relationship management (SRM) applications, according to an IDC survey of more than 60 healthcare providers in the United States.


"The healthcare supplier procurement business is on the cusp of a sea of change as hospitals around the country are trying to become more efficient," said Albert Pang, research manager of Supplier Relationship Management and eCommerce Applications at IDC. "The need to work within a system that is notoriously risk-averse poses a serious challenge to procurement and materials management professionals."

If hospitals fail to make the necessary changes to their procurement systems, the quality of their service will suffer, widening the gap between themselves and hospitals that are fiscally stronger, better managed, and more willing to make technology investments for efficiency gains. Highlights of IDC's 2002 Healthcare Procurement Survey include:

Despite the current controversy over the business practices of leading group purchasing organizations (GPOs), 83% of healthcare providers said they are happy with their supplier relationships, especially the contracts negotiated on their behalf by GPOs

57% of respondents said their current materials management systems are working to their liking, while 43% said they are not satisfied

63% of the respondents said under the current materials management systems the key functions — data management, contract management and electronic transactions — are not integrated

In one of the most comprehensive surveys on healthcare and supply procurement, IDC's recently published study, Healthcare Cost Containment Through eProcurement and SRM: A Survey of U.S. Hospital Materials Management Professionals, (IDC #28413) examines the latest developments in the market and current challenges that healthcare providers are confronted with through the eyes of more than 60 materials management and procurement professionals representing 517 hospitals and nearly $15-billion worth of supply expenditures annually. Future strategies of healthcare providers and how they will impact their relationships with GPOs, medical product suppliers, pharmaceuticals firms, materials management technology vendors, ERP system management providers and procurement services companies are also discussed.

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