With tremendous pressures to reduce costs within the U.S. health care system, health care providers must look at ways to lower their purchasing costs. When it comes to purchasing medical devices, products and services, there are submerged costs, such as storage, maintenance, and disposal costs, that are not considered during procurement decisions. Therefore, they may be paying more in the long term for a product with a lower sales cost. These costs are a part of the total cost of ownership of a product or service. Purchasing decisions should include these costs to assess the full costs to an organization.

Health care organizations that consider the total cost of ownership in their supply chain purchasing considerations will benefit by:

  • Reducing the costs of providing quality health care.
  • Increasing product and service efficiencies to ensure products are not wasted (disposed).
  • Minimizing the environmental footprint of health care through purchasing efficiencies.
  • Reducing the use of resources, such as energy and water; reducing the amount of waste disposed and associated costs; and using safer chemicals to reduce potential impacts to patients and staff.

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