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Small savings can be antidote for financial stress

March 31, 2021


The COVID-19 pandemic has led to financial setbacks and constraints for many pediatric practices, raising pediatricians’ anxiety and distress.

One way to shore up finances is to look for ways to save on medical supplies. Even small cost savings can provide significant breathing room.

Following are suggestions from the AAP Section on Administration and Practice Management to reduce expenditures on medical supplies.

Review prices from your medical distributor.

The price practices pay for an item from a national distributor — even for the same brand and quantity — can vary by as much as 20%. However, it’s overwhelming to price shop for the hundreds of items your practice routinely purchases.

Instead, get reports from your national medical supply distributors through your online account that show your aggregate spending on particular items. Concentrate on:

  • items you buy frequently or in large quantities (bandages, gauze, alcohol pads);
  • expensive items (Bicillin, lab equipment);
  • items that have increased significantly in price during the pandemic (gloves, face masks); and
  • items billed to patients (COVID-19 test kits, lead test kits).

Buying through a group purchasing organization (GPO) will almost certainly reduce your spending, and you still can choose your preferred brand and order from the same representative/website.

Significant variability exists among GPOs. Some specialize in surgical supplies and equipment, others in bulk linens for nursing homes. These vendors may not offer the best prices on medical supplies commonly used in a busy pediatric office.

While the AAP does not endorse any GPOs, it lists those with whom members have worked (

Contact a GPO and ask for a price comparison on your top 25 priority items. While some GPOs may not want to disclose a complete list of prices before you sign up, they should be able to tell you whether they can match and/or beat the prices you’re paying. Some GPOs charge a membership fee; evaluate this within the context of the savings offered.

Consider staff input when evaluating less-expensive substitutes.

When the price of two brands of the same item differ significantly, it may be worthwhile for your staff to run a comparison trial to see if the lower-priced item has similar quality. Your staff’s feedback might indicate that off-brand vaccine needles tend to slip off syringes and are not worth the savings, but the paper towels that are 10% cheaper are comparable to your usual brand.

Re-evaluate your par levels (safety stock).

The volume of visits at many pediatric practices has fallen significantly due to COVID-19; other practices are doing a significant number of visits by telemedicine.

Nonetheless, some practices still order the same amount of nebulizer supplies and table paper. Take a hard look at your inventory, particularly items with a limited shelf life, to determine if you can replenish less frequently.

Evaluate vaccine prices.

Because vaccines often are the single biggest expense for a practice after payroll, even a small savings can have a huge impact. Vaccine buying groups should be able to match (and often beat) the private sector cost per dose posted by the Centers for Disease Control and Prevention at Most pediatric vaccine buying groups require you to commit to a particular brand (GlaxoSmithKline, Merck, Sanofi) when available.

With good planning, practices in nonuniversal vaccine states should be able to make at least a modest profit on their vaccine programs. For more information, see the AAP Business Case for Pricing Vaccines at

Leverage cash flow with discounts and credit cards.

Ensure your practice’s accounts payable is organized, so you can take advantage of prompt pay discounts. Almost all vaccine manufacturers offer a 2% discount when an invoice is paid in full by the 60th day after receipt. A practice that pays its vaccine bill on day 60 with a credit card effectively gets 90 days to pay, plus the opportunity to get an additional 1% or more cash back on credit card purchases.

Dr. Berman is chair of the AAP Section on Administration and Practice Management Executive Committee.

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