Of barriers and bridges: Buyer-supplier relationships in health care

Background As the second largest expense category after labor, supply expense has received more strategic attention in recent years. Collaborative buyer-supplier relationships play a significant role in strategic supply chain management. In the health sector, however, buyer-supplier relationships are generally perceived as adversarial and distrusting. Purpose The aim of this study was to investigate the major buyer-supplier relationship barriers, with an emphasis on the role of the physician as a surrogate buyer in the hospital's procurement process. Methodology Semistructured interviews were conducted with informants from six health systems and five medical device manufacturers in the United States. Additional data were gathered through a focus group consisting of 10 senior-level physicians. A structured qualitative analysis identified important themes in buyer-supplier relationship factors. Results From the data, four major themes emerged regarding the barriers to collaborative buyer-supplier relationships: lack of information sharing, opportunistic pricing behavior, changing regulations, and physician-supplier alliances. Further investigation regarding the role of the physician in purchasing reveals triadic implications. Conclusions The medical device market continues to exhibit strained buyer-supplier relationships. The physician's professional role in supply selection can undermine the hospital's strategic supply management efforts. Practice Implications Both buyers and suppliers need to exhibit more information transparency in order to develop collaborative relationships with at least a small number of strategic partners. Supply chain executives at hospitals need to play a more active role in facilitating the link between the hospital's physicians and suppliers. Alternatively, hospitals can provide physicians with substitute services to curb supplier influences on physician preferences.