Medical supply distribution poised for e-commerce migration
Skip to main content
MDHC_Logotype_white
Subscribe
  • My Account
  • Login
  • Subscribe
  • News
    • This Week's News
    • COVID-19
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • People
    • Regional News
    • Digital Edition
    • Ohio to save $240M in Medicaid drug costs by running its own PBM
      MACPAC approves recommendations on specialty drugs, behavioral health
      Top R.I. state official will take over, review hospital agency
      No region in the world spared as virus cases, deaths surge
    • No region in the world spared as virus cases, deaths surge
      We're losing engaged providers, and healthcare will pay the price
      J&J vaccine problems hamper U.S. military vaccines overseas
      U.S. suicides dropped last year, defying pandemic expectations
    • Calls mount for Biden to track U.S. healthcare worker deaths from COVID
      Front-line workers want more assistance after a year of COVID-19
      Healthcare providers enter Philadelphia's legal fight to enact gun laws
      Taking population health expertise to the market
    • Cigna and Oscar expand their small business partnership
      5 things to know about Agilon Health's proposed IPO
      More than a half million Americans gain coverage under Biden
      Insurance auto-retention policies could halve number of people kicked off coverage
    • MACPAC approves recommendations on specialty drugs, behavioral health
      No region in the world spared as virus cases, deaths surge
      CMS wants to bump pay for hospices, SNFs next year
      MACPAC wants to cut Medicaid spending on high-cost specialty drugs
    • Outgoing UHS chief made almost 50% less in 2020 than 2019
      A hundred dollar bill cut into strips with a colorful background.
      Population health still at odds with fee-for-service
      Private equity could increase long-term Medicare spending, MedPAC says
      Jeb Bush, Marilyn Tavenner getting in on healthcare SPAC frenzy
    • Healthcare data breaches
      By the Numbers: National health information service providers
      Health systems are navigating the digital divide and vaccine access
      woman doctor shaking hands with nurse and smiling
      Sponsored Content Provided By Philips
      A stronger healthcare system requires bold new ways of working together
    • Fight against STDs lost amid coronavirus testing blitz
      Beyond the Byline: Kids' unchecked mental health needs pose long-term consequences
      Hospitals vary widely in reducing C-section rates, but some progress in other maternal health metrics
      Home improvement to be provided by ProMedica's new healthy homes initiative
    • Novant Health adds chief payor performance officer
      Kaiser Permanente names Comer chief IT officer
      Mass General Hospital's Slavin to retire as CEO
      UnitedHealthcare names Thompson as new CEO
    • Midwest
    • Northeast
    • South
    • West
  • Insights
    • ACA 10 Years After
    • Best Practices
    • Special Reports
    • Innovations
    • The Affordable Care Act after 10 years
    • A close-up of a woman receiving a COVID-19 vaccine.
      Providers in underserved communities work toward equitable vaccine distribution
      Josh Bradshaw
      How one rural Illinois county vaccinated 84% of its senior citizens by early March
      Dr. John Fischer
      Patient-reported outcomes tool for hernia surgery helps physicians improve care
      New care model helps primary-care practices treat obesity
    • A family photo of the the Hangens.
      Stressing the already burdened pediatric behavioral health system
      Jennifer Pannone and her daughter Victoria.
      Mental health access for children needs attention
      What's next for on-demand telehealth companies?
      A CalOptima PACE vaccination clinic.
      Will COVID-19 be the catalyst for creating a more sustainable healthcare system?
    • Ryan McGinnis
      Finding efficiencies in the OR using tech
      Dr. Daniel Hall
      UPMC pilots machine learning, telehealth to inform patient transfers
      A woman being recorded using her inhaler on a smartphone.
      Digital check-ins, connected inhalers help control asthma
      A phone screen showing the question, "Mary we hope this information was helpful and we'd like to keep guiding you. Are you interested in knowing when it's your turn to receive the vaccine?"
      Chatbots, texting campaigns help manage influx of COVID vax questions
  • Transformation
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Nearly 1 in 5 Americans skipped care due to cost last year
      COVID-19 long-haulers need holistic treatment, providers say
      Amazon expanding employee clinics into two more states
      What's next for on-demand telehealth companies?
    • Malpractice premiums peak in 2020, AMA survey shows
      A rendering of a cancer research institute at the University of Southern California that will include 5G.
      Healthcare providers determine how to best use ultrafast 5G
      Two-thirds of largest hospitals aren't complying with price transparency rule
      'Silver lining': Hospitals keep practices born in COVID rush
    • Addressing long-standing barriers needed for mental and physical health integration
      A close-up of a woman receiving a COVID-19 vaccine.
      Providers in underserved communities work toward equitable vaccine distribution
      The waiting room of a Kaiser Permanente clinic at a Target location.
      Health systems revamp their approach to retail clinics
      Josh Bradshaw
      How one rural Illinois county vaccinated 84% of its senior citizens by early March
    • CMS wants to bump pay for hospices, SNFs next year
      CMMI pauses new Direct Contracting model applications
      CMS wants to boost payments over 2% for inpatient rehab, psych facilities
      40 Oregon providers, insurers sign value-based care pact
  • Data/Lists
    • Rankings/Lists
    • Interactive Databases
    • Data Points
    • Health Systems Financials
      Executive Compensation
      Physician Compensation
  • Op-Ed
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
    • Dr. Alan Kaplan
      The risks, rewards of taking organizations 'where they haven’t gone before'
      Wellstar CEO calls adapting for the pandemic her bold move
      Howard P. Kern
      Recognizing the value of telehealth in its infancy
      Dr. Stephen Markovich
      A bold move helped take him from family doctor to OhioHealth CEO
    • Drs. Hal Paz and Joshua J. Joseph
      Mobilized to fight the COVID crisis: a blueprint for community and academic partnerships
      Dr. Stephen Markovich
      Making sure we're aligned along the path to achieving inclusion
      Barry Ostrowsky
      Ending racism is a journey taken together; the starting point must be now
      Laura Lee Hall and Gary Puckrein
      Increased flu vaccination has never been more important for communities of color
    • We're losing engaged providers, and healthcare will pay the price
      Bonnie Castillo and John Welton
      Dueling opinions: The role of mandated nurse staffing ratios
      Dr. Chris DeRienzo
      How COVID-19 broke health systems and made them stronger
      Still crossing the quality chasm: a look at the IOM's seminal report 20 years later
    • Letters: Eliminating bias in healthcare needs to be ‘deliberate and organic’
      Letters: Maybe dropping out of ACOs is a good thing for patients
      Letters: White House and Congress share blame for lack of national COVID strategy
      Letters: VA making strides to improve state veterans home inspections
    • Sponsored Content Provided By Optum
      How blockchain could ease frustration with the payment process
      Sponsored Content Provided By Optum
      Three steps to better data-sharing for payer and provider CIOs
      Sponsored Content Provided By Optum
      Reduce total cost of care: 6 reasons why providers and payers should tackle the challenge together
      Sponsored Content Provided By Optum
      Why CIOs went from back-office operators to mission-critical innovators
  • Awards
    • Award Programs
    • Nominate
    • Previous Award Programs
    • Other Award Programs
    • Voting Open - 50 Most Influential Clinical Executives
      Nominations Open - Top 25 Innovators
      Nominations Open May 24 - Top 25 Emerging Leaders
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top 25 Innovators
    • Minorities in Healthcare
      • - Luminaries
      • - Top 25 Minority Leaders
      • - Minorities to Watch
    • Women in Healthcare
      • - Luminaries
      • - Top 25 Women Leaders
      • - Women to Watch
    • Excellence in Nursing Awards
    • Design Awards
    • Top 25 COOs in Healthcare
    • 100 Top Hospitals
    • ACHE Awards
  • Events
    • Conferences
    • Galas
    • Webinars
    • COVID-19 Event Tracker
    • emburse certify modern healthcare custom media webinar logo lockup
      Sponsored Content Provided By Emburse
      Webinar: Making it easy to manage costs
      virtualmed staff modern healthcare custom media logo lockup
      Sponsored Content Provided By VirtualMed Staff
      Webinar: Best practices for creating a successful telepsychiatry program
      telehealth visit man touching neck while speaking to doctor on computer
      Sponsored Content Provided By Accumen
      Webinar: How telehealth has evolved into a standard of care
      modern healthcare custom media and trimedx custom webinar logo lockup
      Sponsored Content Provided By TRIMEDX
      Webinar: Bridging the gap between clinicians and administration to improve capital equipment planning
    • Women Leaders in Healthcare Conference
    • Social Determinants of Health Symposium
    • Healthcare Transformation Summit
    • Leadership Symposium
    • Virtual Briefings
      • - Hospital of the Future
      • - Mental Health
      • - Patient Safety & Quality
      • - Strategic Marketing
      • - Virtual Health
      • - Workplace of the Future
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Minority Leaders Gala
    • Top 25 Women Leaders Gala
  • Listen
    • Podcast - Next Up
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
    • Dr. Chris DeRienzo
      Next Up Podcast: Building team spirit in the wake of COVID-19
      Mikelle Moore
      Next Up Podcast: Mikelle Moore on recognizing all hospital workers during the pandemic
      Empty boardroom
      Next Up Podcast: What's going to happen tomorrow? Succession planning during emergencies
      Next Up Podcast: Educating patients on the COVID-19 vaccine with Tanya Andreadis
    • Beyond the Byline: Kids' unchecked mental health needs pose long-term consequences
      Beyond the Byline: How COVID-19 has impacted hospital finances
      An older man sitting on a hospital bed with his back toward the camera.
      Beyond the Byline: Upcoding could explain why hospitals are increasingly billing for the most complex treatment
      Beyond the Byline: Insurers are betting on virtual-first plans as COVID-19 shifts care pathways
    • James garvert neustar healthcare insider podcast image
      Building on basics
      Healthcare Insider Podcast Episode Art - Premier
      Why Roger Weems and other consultants are leaving the big firms to join Premier
      James garvert neustar healthcare insider podcast image
      Outreach during COVID-19
      ann barnes healthcare insider podcast image
      Leading with intention to promote diversity and inclusion
    • The Check Up: Matt Eyles
      The Check Up: Matt Eyles of AHIP
      The Check Up: Dr. Tom Shanley
      The Check Up: Dr. Tom Shanley of Lurie Children’s Hospital of Chicago
      The Check Up: Dr. Harold Paz
      The Check Up: Dr. Harold Paz of Wexner Medical Center at Ohio State University
      The Check Up: Pat Schou
      The Check Up: Pat Schou of the Illinois Critical Access Hospital Network
    • ivana naeymi-rad one on one intelligent medical objects
      Video: Ivana Naeymi Rad of Intelligent Medical Objects
  • MORE +
    • Advertise
    • Media Kit
    • Newsletters
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Transformation Hub

Where healthcare challenges find solutions

  • Patients
  • Operations
  • Care Delivery
  • Payment
Operations
February 01, 2018 12:00 AM

Medical supply distribution poised for e-commerce migration

Alex Kacik
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print

    While Amazon crafts its business plan for healthcare, a handful of entrepreneurs are parlaying parts of Amazon's model into an online marketplace for dental supplies.

    Dentist Scott Drucker's inspiration hit after he found that he could buy cheaper dental supplies online than what distributors offered, so he decided to create his own e-commerce platform to allow others to do the same.

    After graduating from dental school at the University of Pennsylvania and starting his periodontics residency at the University of Illinois, Drucker had spoken to two of the biggest dental supply companies, which offered him a "generous discount" as a new dentist. But after checking other sources online, Drucker found every one of his products for a substantially lower price, he said.

    "It was a timeout moment," Drucker said. "We are led to believe that the biggest companies theoretically provide the best discounts, but that was not at all the case."

    Big suppliers' business models are built on sales representatives that offer high-touch, personalized service but also add cost, Drucker said. Smaller practices that don't have the scale to negotiate a better deal often lose out.

    Drucker created Supply Clinic, where customers can peruse implants, orthodontics, cements and other products from more than 100 manufacturers, which ship items directly to their office. Supply Clinic, which was born about four years ago and developed in the Chicago-based healthcare incubator Matter, is suited for smaller one- or two-office practices that can save them 30% to 35% on each product, Drucker said. "Dentists are waking up to the fact that they are heading a pretty tremendous margin on supplies," he said.

    It's only a matter of time until most supply chain transactions are done through e-commerce platforms, said Paul Ketchel, founder of MDsave, a online marketplace that offers medical services a la carte.

    "I think we are in process where legacy models with multiple intermediaries in a transaction, similar to banking or the travel industries, are changing," he said. "These companies will have to adapt."

    As healthcare spending balloons and consumes a growing portion of the country's GDP, providers and payers look to aggressively cut costs. Industry middlemen that can inflate the pricing of healthcare products and services are particularly vulnerable, as consultancy PricewaterhouseCoopers highlighted in its recent year-end report. Intermediaries will have to reassert their value by increasing price transparency to avoid extinction, the report said.

    "Middlemen don't currently play one of the major roles in the industry as a financier, diagnoser or deliverer of care, that's why they are getting squeezed," said Gurpreet Singh, a partner at the consulting firm PricewaterhouseCoopers and its health services sector leader.

    More transactions will shift to e-commerce sites as medical professionals dismiss the sales rep model, Drucker said. "I don't think people are going to be willing to pay premiums for the same supply they can process themselves on an e-commerce site," he said.

    Amazon recently announced that it was teaming up with JPMorgan Chase and Berkshire Hathaway to create a healthcare company that's aiming for a lower-cost model. The e-commerce giant has also been quietly growing its medical supply business through its Amazon Business Platform, which has more than 1 million customers and 85,000 sellers.

    But as Amazon and other retailers continue to expand their medical supply catalogs, patient safety concerns arise as products are diverted to the "gray market," Drucker said. Some U.S.-based suppliers buy products that were originally intended for a foreign market and skirt U.S. laws and regulations.

    The increasing frequency of drug shortages has drawn focus on gray-market vendors and their often inflated prices as well as concerns about the quality and safety of their products. Of 549 hospitals that responded to an Institute for Safe Medicine Practices survey in 2011, 56% reported receiving daily solicitations from gray-market vendors and 52% reported purchasing drugs from gray market vendors in the last two years.

    As more distribution models shift to an e-commerce platform, these issues will become even more important, experts said. "If there is dental cement or composite that wasn't shipped at a proper temperature, that could break down quickly and impact someone's health and become a financial burden," Drucker said. "That's why we take quality control very seriously."

    Tags: Operations, Suppliers, Transformation, Operations, Transformation Hub
    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    Malpractice premiums peak in 2020, AMA survey shows
    Malpractice premiums peak in 2020, AMA survey shows
    Healthcare providers determine how to best use ultrafast 5G
    Healthcare providers determine how to best use ultrafast 5G
    Sponsored Content
    Get Newsletters

    Sign up for enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today
    MH Magazine Cover

    MH magazine offers content that sheds light on healthcare leaders’ complex choices and touch points—from strategy, governance, leadership development and finance to operations, clinical care, and marketing.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS
    • Instagram

    Our Mission

    Modern Healthcare empowers industry leaders to succeed by providing unbiased reporting of the news, insights, analysis and data.

    MDHC_Logotype_white
    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • News
      • This Week's News
      • COVID-19
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition
    • Insights
      • ACA 10 Years After
      • Best Practices
      • Special Reports
      • Innovations
    • Transformation
      • Patients
      • Operations
      • Care Delivery
      • Payment
    • Data/Lists
      • Rankings/Lists
      • Interactive Databases
      • Data Points
    • Op-Ed
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Awards
      • Award Programs
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top 25 Innovators
        • Minorities in Healthcare
          • - Luminaries
          • - Top 25 Minority Leaders
          • - Minorities to Watch
        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Nominate
      • Previous Award Programs
        • Excellence in Nursing Awards
        • Design Awards
        • Top 25 COOs in Healthcare
      • Other Award Programs
        • 100 Top Hospitals
        • ACHE Awards
    • Events
      • Conferences
        • Women Leaders in Healthcare Conference
        • Social Determinants of Health Symposium
        • Healthcare Transformation Summit
        • Leadership Symposium
        • Virtual Briefings
          • - Hospital of the Future
          • - Mental Health
          • - Patient Safety & Quality
          • - Strategic Marketing
          • - Virtual Health
          • - Workplace of the Future
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Minority Leaders Gala
        • Top 25 Women Leaders Gala
      • Webinars
      • COVID-19 Event Tracker
    • Listen
      • Podcast - Next Up
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • MORE +
      • Advertise
      • Media Kit
      • Newsletters
      • Jobs
      • People on the Move
      • Reprints & Licensing