Perform Due Diligence When Working With New Vendors

Written by the Nisivoccia Team

Whether your practice is considering a new services provider or making a capital investment, such as buying or leasing medical equipment, due diligence is an essential part of the process. Here are some key steps to help ensure you’ll get your money’s worth from the vendor.

Ask around

A good place to start is your own professional network. Talk to your fellow physicians or their office managers about the product or service you’re considering

If you attend a conference or seminar, ask other attendees whether they’ve used the product or service to get an idea of what their experiences were. Healthcare trade shows are another good place to learn about new products and services that might improve your practice.

Require references

When you have narrowed down your vendor choices, ask each one for references. First and foremost, request references that resemble your own practice in terms of size, specialty, payer mix and patient volume.

You might also ask vendors to cite clients that they’ve drawn away from competitors. That way, you can learn why those references chose the vendor in question over another.

Conduct a site visit

Although written references are fine, talking to someone in person is better. When you’ve settled on one or perhaps two prospective vendors, schedule at least one site visit with a reference to get a better sense of how the equipment or service works in the real world.

You’ll likely want to hear from physicians, office managers and other selected staffers concerning their experiences with the product or service. Bear in mind that the views of physicians and office managers may differ from those of other staff members. A minor problem for a doctor or manager may be an enormous headache for someone who uses a product or service regularly.

In planning any site visit, create a list of questions that will help you understand the pros and cons of the vendor. These may include:

• How did you find this vendor? Did you have a previous relationship?
• What other vendors did you consider before settling on this one?
• What were your interactions with the vendor
• What do you like best about this vendor? Least?
• How does the everyday experience of working with the vendor’s product or service compare with the sales pitch?
• How would you rate this vendor’s overall customer service?

Also, if you’ll use the product or service at multiple practice sites, interview a reference with multiple sites to determine whether the item “travels well.” If possible, try to talk to more than one staff member at each site.

Shop strategically

No matter what you’re investing in, approach every purchase or lease agreement strategically. Your CPA can help you assess your current operational costs and set reasonable budgets for acquiring whatever you need.

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