HSE suppliers facing 8% cut

Companies supplying the HSE with goods and services are facing a cut of 8% in what the health authority pays them in the coming year.

The HSE has alfeady implemented a price freeze, and in some cases price reductions, in its bought-in goods and services. These would include items such as medical eqauipment and sterile and laundry supplies.

Now, in a letter to suppliers, the HSE says it is going to negotiate initially with its top 20 suppliers in terms of spend to achieve a further 8% price cut. It will then negotiate with remaining suppliers to achieve a similar price reduction.

The letter to suppliers admits that the measures will be difficult, but the HSE says it trusts that that suppliers who have and continue to enjoy the benefits of a substantial contribution to their income from taxpayer funds will fully support the cost-saving measures.

Industry sources have warned that the price cut could have serious effects on the profitability of some firms who supply goods and services to the HSE.

These companies, they argue, have already taken a hit through price freezes and cuts already implemented by the HSE, and some have also had to absorb recent price increases from manufacturers.

[Posted: Wed 26/08/2009]