Preparing for price negotiations
The director of procurement was preparing for an upcoming vendor contract negotiation meeting. They emailed the Supply Guide Analytics team with a request to evaluate current annual spend on cardiothoracic products that are used in the hospital.
Price proposal analysis
Staritas’s Supply Guide Analytics team conducted a price analysis of the vendor’s proposed and current price paid against five benchmark price points; Staritas clearly summarized the potential savings opportunity, shown below. The Supply Guide Analytics team was able to price benchmark $1,897,769 spend by the health system and identified significant savings opportunities at every benchmark level.
| Overall Savings | Totals |
| Total Spend Benchmarked | $1,897,769 |
| Potential Savings Low | $328,776 |
| Potential Savings 25th Percentile | $224,423 |
| Potential Savings Median | $176,635 |
| Potential Savings 75th Percentile | $82,227 |
The price analysis report included a pie chart, that clearly summarized the degree of opportunity. The pie chart below illustrates that 98% of the health system’s spend was above the median price benchmark, 0.5% of the spend was between the median price and the lowest price benchmark, and that 0.9% was at, or below, the lowest price benchmark. The chart hyperlinked to a detailed Excel table that provided the director with SKU-level information down to the vendor, part number, volume, and benchmark price comparisons to five national price points.
Outstanding client support
Within 24 hours, Staritas provided the director of procurement with a Supply Guide Proposal Analysis identifying potential cost savings with details down to the SKU level. The director used this insight to realize savings in excess of $135,000.
