By Wes Crampton, President, MedSpeed

When supply chain and purchasing managers put medical courier services out for bid, the evaluation often comes down to two familiar metrics: cost per stop and cost per mile. That’s how procurement works, and on its face, it’s a reasonable framework.

The fact is that the lowest-priced healthcare courier is often far from the lowest-cost choice. Yet most request for proposal (RFP) processes are built to find the lowest number, not to uncover the true cost of the operation. Sometimes, organizations ask the wrong questions. More often, they’re asking vendors to price route spreadsheets that provide little visibility into the operation and may be based on networks that were never optimized in the first place. 

That’s why the quality of the RFP matters as much as the bids it generates. Successful procurement depends on two things: asking the right questions and giving vendors enough visibility to design a solution that supports the growth and changing needs of your health system. Together, these elements help organizations evaluate the lowest total cost of the operation, not simply the lowest bid.

Is your RFP asking the right questions?
The following areas can help determine whether a provider will deliver lasting value.

1. Execution and capability
   Being able to cover a geographic footprint is not the same as capability. You need to know if a potential partner has the infrastructure, operational discipline, and healthcare-specific experience to perform consistently under pressure and scale reliably as a network evolves.
   
   
2. Quality and risk management
   Courier errors carry real clinical consequences — specimen mishandling alone costs the average three-to-four-hospital system $1 million or more each year. Your RFP should evaluate each vendor’s error rate and ask how they work to prevent errors, manage exceptions, and protect chain of custody.
   
   
3. Value over the life of the contract
   The right logistics partner should improve performance year after year. Technology, reporting, governance, and a demonstrated commitment to continuous improvement are what separate a transactional medical courier from a strategic last-mile logistics partner.

But even the best questions won’t produce good proposals if vendors don’t have a complete understanding of the operation. 

Are providers pricing your operation or your spreadsheet?
Most courier RFPs include a route spreadsheet with a representative sample of current route schedules, stop counts, volumes, etc. While useful, they rarely tell the full story of the healthcare network’s true needs.

Routing requirements evolve over time as a health system grows, service exceptions occur regularly, and operational nuances often exist that are difficult to capture in a static document. These spreadsheet exercises don’t account for any of that. As a result, pricing is built on assumptions rather than a comprehensive operational assessment. 

But the larger issue is that these exercises assume the network being priced is already structured correctly. Historical route data shows providers how the operation has been run, not necessarily how it should be run. 

When the network is flawed, a lower price doesn’t create savings; it simply puts a cheaper price tag on an expensive problem. 

When incomplete information leads to inaccurate pricing
We worked with one healthcare organization in the Midwest that learned this firsthand after selecting a courier provider that appeared to offer significant savings. The proposal was developed primarily from existing route information and did not fully account for the network’s operational complexity. 

Soon after implementation, issues emerged spanning routing and quality. Routes were not scheduled accurately, resulting in missed service windows and inefficient delivery sequences. Additional on-demand deliveries became necessary to compensate for quality issues (lost and damaged specimens) and routing inefficiencies.

Although the chosen provider’s proposed pricing was nearly 30 percent lower than competing proposals, that advantage quickly disappeared. Once fully up and running, the solution cost nearly 12 percent more than alternative proposals while still failing to meet operational expectations. As a result, the health system renewed their partnership with us after just one month.

A different approach: Let potential partners see the operation
We also worked with a large, multi-state health system that took a different approach. Rather than asking vendors to price the existing operation from sample routes, they invited shortlisted providers onsite before final proposals were submitted. Vendors met with operational stakeholders, observed workflows, reviewed service requirements, and validated assumptions about the network.

As a result, potential partners gained an accurate picture of the resources required to deliver the expected level of service — today and into the future. 

The health system was able to compare proposals with greater confidence and avoid the implementation surprises and cost increases that occur when pricing is built on incomplete or suboptimal information.

The key takeaway
When looking for a reliable last-mile logistics partner, an RFP is a great place to start. But rather than basing the decision on a spreadsheet exercise, healthcare leaders should consider starting with an RFI (or request for information) to narrow down your options. From there, invite select finalists into your operation so they can analyze your true needs and provide a more accurate proposal, one that challenges assumptions and identifies opportunities to improve your network for long-term efficiency and savings.

To learn more about evaluating healthcare courier providers and identifying the true cost of last-mile logistics, visit medspeed.com.