Now, let's talk about the work of a medical equipment trading company.
As a trading company, price negotiations are an unavoidable part of our business.
A trading company buys low and sells high.
This time, I'd like to write about a unique product category in this industry called "specific medical materials" and the actual process of price negotiations related to them.
skeeze / Pixabay
特定保険医療材料とは
First, let me briefly explain what "specified medical materials" (hereinafter referred to as "special materials") are.
Special materials are, among medical devices, particularly"Insurance reimbursement price"It has an added feature called "repayment" (sometimes simply referred to as "redemption").
If you use a product that has this added feature, the government will reimburse you for the equivalent of the reimbursement price.
It's similar to the concept of "drug price" in the pharmaceutical industry.
Why has this redemption price been set?
There are many reasons, but the reason I like it is,I believe this is to ensure that everyone can receive high-quality medical care.
Specific example
For example, there are adhesion prevention sheets used in gynecological surgeries and other procedures.
This is applied to the surgically treated tissue to prevent adhesion between that tissue and surrounding organs.
While surgery can be performed without using this sheet, doing so increases the risk of adhesions, which can lead to chronic abdominal pain and infertility in the patient.
In other words, it can be said that it is something that patients should definitely use.
If this sheet does not have a reimbursement price and the hospital has to bear the high cost of the material, the hospital may choose not to use it for financial reasons.
However, from the government's perspective, having patients use this sheet would be beneficial for them and could also help prevent other diseases.
That is why the country,A "reimbursement price" is added to ensure that hospitals do not incur losses when using these materials.
Special materials can be described as products that the government has given its seal of approval to, essentially saying, "Use them without hesitation."
Of course, this is all assuming it's used within the appropriate scope.
Regarding revisions to insurance reimbursement prices
Now, regarding this redemption price,Generally, prices are revised every two years, in April.
Some product categories will not be revised, and some revisions will occur at times other than April, but changes will be made regardless.
However, even with revisions, the majority of them are downward revisions.
With rising medical costs becoming a problem, the government must also lower reimbursement prices to curb spending.
While there's a complex formula for calculating the extent of the decline, broadly speaking, it's based on the market price.
Market prices will always decrease due to market principles.
If a hospital is purchasing item A, which has a reimbursement price of ¥10,000, for ¥9,000, and an equivalent item B becomes available for ¥8,000, more hospitals will buy that one, causing the market price for this reimbursement category to steadily decline.
I hope you now understand that redemption prices tend to decrease over time.
Price negotiations with hospitals and wholesale prices from manufacturers
Now, let's finally get to the main point.
When a hospital purchases item A, which has a reimbursement price of ¥10,000, from a dealer for ¥9,000, the hospital makes a profit of ¥1,000 when using item A (in reality, the hospital's profit will be slightly lower due to consumption tax).
This is called a redemption profit.
If the reimbursement price is revised and falls from ¥10,000 to ¥9,000, the hospital's reimbursement profit will become ¥0.
Therefore, hospitals naturally demand that dealers lower their prices.
The concept of rate sliding
The benchmark for a compromise at this time is"Rate slide"That's the idea.
The revised policy states that, since deliveries have been made at 90% of the repayment price up until now, the same 90% price will be maintained after the revision.
In the previous example, the price would be ¥9,000 before the revision and ¥8,100 after the revision.
Discrepancy between redemption and list price
The problem for dealers is when hospitals ask them to lower the supply price, but the manufacturer refuses to do so.
A concrete example that has been increasing recently is the discrepancy between the redemption price and the manufacturer's suggested retail price.
A while ago, the redemption price was almost always the same as the manufacturer's suggested retail price.
And when the redemption price went down, I think manufacturers were often willing to adjust the price they offered to dealers accordingly.
However, nowadays, many manufacturers are keeping the list price unchanged from the old repayment system.
For example, let's consider product A, which is sold at 80% of its list price of ¥10,000.
If the redemption price is revised from ¥10,000 to ¥9,000, dealers would want to wholesale it at ¥7,200, maintaining an 80% redemption rate.
However, we are increasingly hearing comments like, "Even if the redemption price goes down, our list price is still ¥10,000, so the price we offer to dealers remains ¥8,000."
If the dealer continues to supply the hospitals with the same markup rate, their profits will decrease.
Therefore, if medical equipment trading companies simply accept all of the hospitals' demands, they will not be able to survive.
If the market price falls, the redemption price will eventually fall as well.
However, from the manufacturer's perspective, they cannot keep lowering prices indefinitely.
Now that manufacturers are starting to stabilize their price adjustments, how hospitals will respond to price negotiations is a point of interest.
geralt / Pixabay
Future Outlook
Reimbursement prices continue to fall, and negotiations with hospitals are becoming more intense.
Hospitals, in particular, are using consulting firms to negotiate prices, and are continuing to negotiate aggressively with dealers based on databases of purchase prices from other hospitals.
Furthermore, there is a growing movement to standardize prices through joint purchasing by hospitals within the same group.
However, there is also data showing that the cost of purchasing pharmaceuticals and medical supplies accounts for only about 20% of hospital expenditures, while personnel costs make up about 50% of expenditures.
Since there's a limit to how much you can haggle down the price of consumables, it seems that companies will have to start cutting labor costs in the future.
In particular, I believe it is necessary to further promote outsourcing and work-sharing, such as having specialists perform tasks that only specialists can do, and having other people handle menial tasks that anyone can do.
Meanwhile, as costs continue to rise, manufacturers are increasingly raising rental fees for equipment and increasing prices for non-specialized materials, particularly in the field of orthopedic implants.
If you do nothing, you will naturally gradually decline.
Unless we introduce groundbreaking treatments that create new reimbursement categories, the situation will become increasingly difficult.
Car dealerships, caught between hospitals and manufacturers, are also facing an uncertain future.
However, while an increase in the number of patients is expected until 2040, when the number of people aged 65 and over is projected to peak, we cannot afford to become complacent, or we will be left behind.
Since dealers don't develop and research products themselves, securing personnel who can quickly adapt to new situations is especially important.
I hope this article will be of some help to anyone interested in the industry.
A compilation of work-related articles published on this blog.