What Is the Real Price of Switching Medical Technologies? Evaluation of Financial and Value-Based Aspects: The Case for Dialysis

OBJECTIVES: The medical technology industry is facing significant cost increases in raw materials, energy, labor, and global supply chain due to the unstable global geopolitical environment. These developments lead to price increases, prompting healthcare providers to consider switching suppliers. However, switching may bring a lot of unforeseen costs that are often not considered in procurement processes. Therefore, the objective of this research is to explore the impact of switching as well as the associated mitigations.

METHODS: A combination of descriptive and exploratory approaches was applied. Initially, a comprehensive literature review was conducted (N. 11) to gain a detailed overview of the costs and risks of switching suppliers in general, in healthcare and specifically in dialysis. To enhance the research quality, interviews with experts in dialysis landscape and procurement from five countries (Sweden, Saudi Arabia, Germany, Canada, and UK) were conducted. These interviews provided deeper insights and highlighted areas of interest not well covered in existing literature.

RESULTS: Despite the lack of data available, the literature and interviews identified various risks and costs associated with switching suppliers. The main categories that could be identified were staff training (which constitute more than 50% of the total switching costs currently visible), patient adjustment difficulties, transition time, implementation interruptions, increased procurement workload, contractual penalties, opportunity costs, disrupted customer-supplier relations, and potential impacts on long-standing partnerships.

CONCLUSIONS: Even though evidence is very limited when it comes to switching costs, there are indications in what areas suppliers can focus on. Healthcare providers that are considering switching suppliers should concentrate measuring rather the value that a partner (supplier) is offering than focus purely on short-term financial aspects. This would give direction whether the switch is worth it or not. Suppliers should prioritize offering high value and partnering with providers, thereby limiting the hidden costs and risks as much as possible.