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Welcome to this episode of Procurement Reimagined, brought to you by Gatekeeper. Joining us today from Munich in Germany is Lennart Eltzholtz, MD of Sana Einkauf & Logistik GmbH.

Join us as we discuss the challenges of procurement in the healthcare industry and the need for collaboration between procurement and medical experts. Lennart emphasises the importance of ensuring hospitals have the necessary products at the right quality and price and highlights the difficulties of managing many medical products. He also suggests establishing cross-functional teams and building trust to make product decisions. They also discuss the scale of procurement in healthcare and the challenges of managing relationships with powerful suppliers.

Lennart is the Managing Director of Sana Einkauf & Logistik GmbH and authorised representative of Sana Suisse Med AG based in Baar. In addition to the topics of purchasing, logistics, and hospital management, he is enthusiastic about the approaches to systems theory, management, and economics. Lennart has also co-authored "Supply it: Practical Guide for Purchasing and Logistics in Hospitals" and hosts the HealthCareBrain podcast.

Key Highlights:

01:20 - 02:09 - The Procurement Challenges in the Medical Industry
Lennart explains how, in Germany alone, there are over a million medical products and pharmaceuticals for sale. Hence, keeping track of these products and keeping them on your radar for supplier and price is a huge challenge. The average hospital will need to maintain an inventory of over 80,000 items. Managing procurement and ensuring that the hospital gets the best price and quality for these items is complex. Over and above this, medical experts have a big say in product selection, which further complicates the task.

07:10 - 08:46 - The Role of Medical Experts in Procurement
Medical experts are responsible for patient outcomes and, hence, will always have a large say in procurement decisions. They will want to use products they have used before and not try an alternative, even if it makes more sense from a procurement lens. The problem is compounded by medical reps from pharma companies with big marketing budgets who convince the medical experts on the efficacy of their product or drug.

09:15 - 11:10 - Building Cross-Functional Teams Between Procurement and Medical Experts
Building cross-functional teams between procurement and medical experts helps build trust between the two functions, and it enables procurement to on-board valuable feedback from medical and nursing experts. This is the starting point of trying to influence change in how things are done. Cross-functional teams also help align different functions to the larger goals of the hospital. For instance, the goal might be to reduce costs while maintaining quality. In this case, the cross-functional team can leverage the negotiation skills of procurement along with the medical experts weighing in on the technical aspects of the product.
Quotes:

“At the end of the day, medical experts have a lot of influence on the suppliers and the products that they want to use. We always have to not only negotiate with suppliers, but try to negotiate internally as well”.

“There are companies that are very clever in placing their product in universities where young medical experts learn how to treat patients. And once the doctor successfully uses the product, there is no motivation to change, and they will continue to use it for the rest of their life”.

“Being a procurement expert in a hospital really means establishing networks and also being someone who's negotiating internally as well as with the suppliers. Perhaps, more internally at some points than externally”.