The Missed Savings report page is a tool that you may use to keep tabs on purchases that hospitals are making that may be suboptimal. By this we mean that you'll be able to tell whether or not a practice is choosing the cheapest price available to them and if not, how often and by how much. You'll be able to see in real time exactly how much the practice could have saved if they'd chosen the cheapest option available to them!
To access this tool, click on Utilities at the top of your page, then Missed Savings.
From there, you'll see a graph with a column showing the missed savings for each of your practices! At the bottom, you'll also see your Total Missed Savings and Weekly Missed Savings for all of your practices combined.
If you click on Filter on the top right, you can then choose to narrow your view by clinic (excluding some clinics from view), date range (narrow your selection by time frame), and include/exclude pre-acquisition data.
You can see graphs for three different metrics - Missed Savings, Percentage Loss, and Purchase Error. Let's look at what each one of these represents in more detail.
Missed savings are generated any time a clinic pays a higher price than they could have paid for a particular item. There are three main reasons this could happen.
The clinic has less competitive pricing than other locations in your group.
The clinic does not have an account connected for the vendor that would have offered the best pricing.
The clinic decided to buy an item from a supplier that wasn't the cheapest option available at the time of purchase. With a choice for the same item between Supplier A at $5, and Supplier B at $4, the clinic chose Supplier A. We call this particular situation "Purchase Error," and it's also tracked as a separate metric.
These calculations do take into account whether or not an item is backordered. So, a clinic will not generate missed savings if the cheaper option for a particular item is unavailable when they place their order.
Overall, missed savings indicate that there is an action your corporate group can take to cut costs (e.g. set up a new vendor account for a hospital). You can see more information on exactly how this metric is calculated here.
Percentage loss is calculated by dividing each hospital's missed savings by their total volume.
Purchase error is a subset of missed savings, and it indicates that the purchaser could have taken a different action at that exact moment to cut costs (e.g. bought the item at a lower price from another connected supplier).
To understand the difference between purchase error and missed savings, let's say a product is available to a clinic for $5 from Supplier A, but the same product is available to another clinic in your corporate group for $3 from Supplier B.
If Supplier B isn't connected for the first clinic, there would be no purchase error generated because the clinic would not have been able to make a better decision at the time of purchase. There would still be missed savings because the clinic could have cut costs by connecting to that supplier and buying that item from them instead.
Below the graph, you'll see a chart showing each of Hospital's Missed Savings data including total spend (sum of all practice spending), missed savings percentage (what percent of their total spend was suboptimal), missed savings in dollars (how many total dollars they could have saved), and purchase error in dollars (the margin by which their price was not optimal).
If you click into any location, you will see a detailed breakdown of that location's spend by product. This includes the following metrics:
Price Paid is the price pulled for this item from the clinic's order history.
Best Hospital Price is the best price offered to this hospital for this item across all suppliers.
Lowest Price from Supplier shows the lowest price available from the supplier that the clinic brought from. This value can show that another clinic within the corporate group had a cheaper price for this product from this supplier.
Best Corporate Location shows the buyer that had the best pricing on that particular product.
Best Corporate Price is the best price offered to a location within your corporate group for that item, regardless of supplier.
You can also choose to view the breakdown by Item rather than Hospital at the top of the chart, as well. This would enable you to see which items have the most missed savings! If you click on the Item Name, you'll see a drop down menu displaying the hospitals that have made suboptimal purchases for this item.
Please note as well, that you can always Export the data that you're viewing (if you want to do some comparisons of your own or perhaps import it into a different program) by clicking on Export on the top right.
Still need help? Send us a message in our Live Chat (the little blue icon in the bottom right corner of Vetcove) and our support team would be happy to help!