What Problems Healthcare Providers Face In India In Sourcing Their Medical Supplies?


Healthcare in India offers some of the best prospects for growth. The sector is growing at an astounding rate for over the last decade or so. The market is full of opportunities particularly when seen through the suppliers’ perspective. Many factors are contributing to this growth story and three of them stand out, namely, rise of private health insurance, state-wise universal health coverage plans and awareness towards preventive healthcare. Despite all this, healthcare providers are unable to get what such a flourishing market should easily provide – a hassle-free procurement mechanism. A variety of problems currently plague the all-important task of sourcing medical supplies in this country of over 1.3 billion people.

Here are some of common problems faced by healthcare providers in sourcing medical supplies –

1# Purchase processes are not streamlined

Medical equipment supply is a domain still fraught with information asymmetry at different levels. This has to go if the benefits are taken right down to the lowest strata- the end users. Similarly, the purchase processes for healthcare providers are not streamlined at all and there is a limited value added with the conventional models of procurement. This is a major problem and it needs immediate remedy for sure. Doctors or hospitals are not independent yet in terms of deciding where to buy or procure. They have only a set network to trust and they abide by it, which is a reason why costs and quality of treatment still suffer here.

2# Lack of a direct sales channel

It’s true that players in the healthcare segment are bound to rely on the conventional model of doing business. Both sellers and buyers, have to wade through the labyrinthine maze of networks including suppliers, associates and distributors at all levels. Manufacturers are not able to get optimized the sales and distribution costs. Medical equipment suppliers in India need to invest a lot in order to boost their coverage and penetration in the market. All this happens for lack of a direct sales channel. It takes a lot of money to let the medical supplies reach from manufacturing units to healthcare centers.

3# Healthcare providers are not getting the right price

Price is a major concern in the healthcare segment as both the parties, manufacturers and healthcare providers complain of not getting it right. The issue is definitely the number of channels involved in the entire process of manufacturing to finally delivering the medical supplies to end users. A lot of resources, including money, go into meeting the requirements of the distribution and sales channels that are layered. So, manufacturers are not in a position to let the price benefits trickle down to the lowest level in the pyramid, i.e. end users. This is one major reason why quality treatment continues to be a major issue in a country of the size of India.

4# Choices and options of selection are limited

Healthcare providers in remote parts of the country are wholly dependent on suppliers for the sale of their products. They will get what is deemed fit by distributors and this fails to include the local dynamics and market sentiments. For example, end users are not able to benefit from the choicest of products manufactured by the top most medical equipment companies in India. After all, they are not in control of sourcing whatever the requirements are in a true sense. This indicates a sad state of affairs in a time when the healthcare segment has taken a giant leap forward towards embracing the online mode of procurement.

5# Genuine products are not a guarantee

Most healthcare providers are not sure whether they are procuring genuine products from authorized distributors. They don’t have any say in selecting the brands and manufacturers for their medical supplies. They get what is made available, and this has to stop so that end users, i.e. the patients, get can benefit from the highest quality of equipment from top manufacturers only. They are not sure whether the procurement is from genuine or authentic players or manufacturers. This can have a big impact as only quality products help deliver superior treatment to patients.

5# Not being able to benefit from the advancement of technology

It’s no secret that healthcare providers are still not in a position to benefit from technology and its advancements. They are bound to procure medical supplies through the same tried-and-tested route involving distributors and suppliers. In a sense, they are still stuck with the traditional mode of procurement when the world has already moved on to the modern direct sales channel route. Online portals are now replacing the existing networks of suppliers and this has broken free the players from the yolks. This is why healthcare in India is growing at a great rate these days and will continue to touch new highs in the years to come!

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