Clearing up buying group misconceptions
As two LMCs with a specific interest in the benefits of buying groups, it was useful to see the article on controlling practice expenses by Mark Pugh.
However, we do feel it contains some points which merit comment and some misconceptions about LMC buying groups we would wish to correct. Firstly, the article tells practices that when placing an order ‘avoid holding more stock than you need', but practices in the LMC Buying Groups Federation (which has over 4,200 practice members) don't have that problem. Apart from vaccines, there are no minimum order values or price breaks – the ‘best pricing' applies to all our members regardless, and they only order when they need to.
Regarding practices running mini-tenders, we completely agree the tender process is important, which is why we already do this for our members, aided by our procurement consultants – who verify that, across a range of goods and services, we already offer savings difficult to match anywhere in the market. There are also no delivery charges to practices.
LMC buying groups, unlike some procurement companies, do not exist to make profits – but only cover costs. Our suppliers know we expect the best pricing for our members and are able to pay us a commission – typically 5% – because of the extra business and savings on sales and marketing. Where margins are particularly tight, we do not seek a commission and there are none at all on vaccine deals. The rebate, mentioned in this article, therefore has little bearing on prices offered to practices.
Finally, Mr Pugh suggests that ‘established purchasing organisations are probably the best source of impartial advice on which suppliers to use' – but in response, we would like to highlight that the LMC Buying Groups Federation employs an established procurement consultancy, Burns Associates, to help us identify suppliers, review their performance and prices, and ensure they deliver the best deals on an ongoing basis.
In the last three months, they have conducted 20 price comparison analyses for new member practices demonstrating savings of 12-35% and up to £12,000 per annum on a basket of six deals. And the cost to practices? Zero.
'Saving practices time and money' is our slogan, and there is ample evidence we are able to do that for our practices.
From Chris Locke, Chief Executive, Nottinghamshire LMC
Sue Broome, Director of Communications and Marketing, Londonwide LMCs