A "new normal".  Governments and insurers across Europe are under enormous pressure to rationalise healthcare costs, including better management of procurement.  Proceur Ltd is helping buyers and suppliers adjust to the "new normal":

• Significant expenditure.  European hospitals spend over US$170 billion on consumables and supplies each year¹, representing 25% of revenues and typically selecting from 60-70,000 different products.  Payers are reducing the list of items they will reimburse.

• Significant complexity.  With over 15,000 hospitals and well over 35,000 other healthcare facilities in the European Union, the market is highly fragmented.  This maze presents a major challenge for buyers and suppliers alike.

• Enormous pressure to rationalise.  70% of hospital spend is financed by taxpayers’ money or other public funds² – money which is in short supply.  We expect continued financial pressure on healthcare operators and suppliers over the next 3-5 years.  Both will need to adapt their cost structures and become more nimble to seize new opportunities.

There is room for further efficiency.  Suppliers to hospitals are typically five- to ten-times larger than their customers³, creating room for significant inefficiencies – particularly salesforce efficiency.

Sources:

1: Proceur Ltd analysis of World Health Organisation Health for All database (2010).

2: Organisation for Economic Cooperation and Development Health Data (2010).

3: Proceur Ltd analysis based on Top 100 EU hospital operators and Top 25 med tech suppliers operating in Europe (2010).