Medical supply firms report big sales to physician offices

Two of the largest distributors of medical supplies to doctors' offices have reported increases in sales to this segment of the health care industry.

Net sales to physician offices by PSS World Medical Inc. of Jacksonville, Fla., grew 15.4% to $396.9 million in the quarter ending April 1, according to a statement released May 12. PSS had net sales to physician offices of $344 million in the quarter ending April 1, 2010.

Henry Schein Inc. of Melville, N.Y., released results on May 3 for the quarter ending March 26. It stated that sales to physician offices had increased to $319.8 million in the first three months of 2011. This represented a 12.4% increase compared with the first quarter of 2010.

The companies cited job creation as the reason physicians were ordering more supplies. So many people get health insurance through their employers that physicians felt more comfortable ordering more supplies, the firms said.

Unemployment was 9% in April, but the economy added 244,000 jobs, according to data from the U.S. Bureau of Labor Statistics.

"This was probably our highest growth quarter since March of 2008," said Gary Corless, CEO and president of PSS. "Doctors are buying more and more. We do believe we are seeing gradually improving utilization. Raising prices is not the way we grow. If we did, our sales would be going down. Cost containment is very important for physician offices." (See correction)

Financial results for other aspects of the health industry also showed growth. Health insurers recently reported earnings and said they were better than expected because their members didn't use health services as much as projected, although money spent by plans on care did go up.

As of Jan. 1, the Patient Protection and Affordable Care Act requires plans to spend 80% to 85% of premiums, depending on whether they are for individual and small-group policies or large-group plans, on patient care and quality improvement.