Why I Use Total Cost of Ownership to Evaluate Every Supplier—Including Coloplast

If you're buying ostomy supplies or continence care products for a healthcare facility, you have probably been taught—or told—to focus on unit price. Don't. After 5 years of managing procurement for a mid-sized clinic network, I'm convinced that total cost of ownership (TCO) is the only reliable way to compare vendors. First question I ask: 'What will this order really cost me, all in?' The answer often surprises people.

What total cost means in practice

Let me use a concrete example. In early 2024, I had to choose between two suppliers for ostomy pouches and adhesion barriers. Supplier A offered a unit price of $2.30 per pouch. Supplier B quoted $2.65. The spreadsheet said A. But my experience with hidden costs told me to look closer. What I found: Supplier A charged $45 per order for handling fragile items (colostomy bags count as fragile), had a mandatory $12 repackaging fee for quantities under 50 cases, and required a minimum order that forced me to buy 30% more than we needed—meaning 30% more warehouse space, more inventory carrying cost, and more waste when product sat past its shelf life. Supplier B included all handling in the unit price, offered free repackaging for quantities as low as 15 cases, and didn't penalize partial orders. After factoring everything in, Supplier A was actually $0.18 per unit more expensive.

The real cost of a $2.30 pouch was $2.83 once you added fees, waste, and storage. Supplier B's $2.65 pouch? $2.72. That $0.11 difference may not sound huge, but across 10,000 units annually, that's $1,100—and that's just one product.

What gets hidden

Standard TCO checklist for medical consumables: unit price, shipping/handling, repackaging fees (if any), minimum order requirements (and their waste impact), shelf-life management costs (product that expires before use), storage space (dollar per square foot per month), staff time to process the order vs. another supplier's process, returns or credits hassle (time is money), and risk of backorder (which leads to emergency purchases at premium from a third source).

For example, when we evaluated a new supplier for wound care dressings (got a quote from a competitor of Coloplast), the sales rep claimed their unit price was 12% lower. But their payment terms required net 15 instead of net 30. That change alone cost us about $200 in delayed cash flow per month. Not huge, but the finance department flagged it. TCO thinking catches those details.

Why TCO matters for Coloplast specifically

Coloplast's pricing for its core products—like SenSura Mio ostomy pouches or Speedicath catheters—tends to be the highest in the market. At first glance, a budget administrator faced with a tight budget might dismiss Coloplast as too expensive. But having run TCO comparisons multiple times, I've found that Coloplast often wins on total cost because their products work more consistently out of the box, reducing waste from failed applications, repeated attempts, and clinical time. The 5-year mechanical survival rate data on their urology products is actually good—meaning fewer replacements, fewer emergency orders, fewer complaints from patients and clinicians. Those savings add up very quickly.

One time, I had a clinician tell me, 'The Coloplast pouches never leak, so I don't have to change them three times a day like with the budget brand. That saves me 20 minutes per patient per shift.' That's real cost. Nearly $2,400 in nursing time per year per patient—not even counting the cost of wasted product. That's TCO.

But does TCO always favor premium brands?

No. That would be too easy. For some products, the premium brand's TCO is higher when you factor in the extra overhead of managing a supplier relationship with a big company (longer lead times, more bureaucracy, more meetings). For commodity items like basic skin barriers or simple dressings where clinical outcomes are identical regardless of brand, a generic supplier with fast, cheap logistics may offer lower TCO. I've seen that happen, for example, with wound care foam dressings where the difference between products is minimal.

The point isn't to always choose the premium brand—it's to know the real cost before you decide.

How I actually calculate TCO

One spreadsheet, three columns: column one: supplier name; column two: 'visible' costs (unit price, shipping, quoted fees); column three: 'hidden' costs (estimated handling, risk, waste, staff time, finance impact). I assign a best-guess dollar value to each hidden cost. And I add a buffer (say 10%) for things I missed. Then I compare the totals. That's it. Not fancy. But I stopped getting surprised by invoices.

For example, when evaluating a new catheter supplier, I included the cost of staff training (about $300 per nurse for a 2-hour session because of overtime pay) and the risk of backorders during a supply chain issue (a 5% chance of a 3-day delay costing about $2,000 in emergency supplies). The spreadsheet then showed that the 'cheaper' option was really $1,800 more expensive per year.

Caveats

TCO thinking works best when you have good data on your own operations—how many products expire per month, how often you rush order, how much warehouse space you use per product line. If you don't track those, you're guessing. Also, TCO doesn't account for intangibles like a vendor's reliability, responsiveness, or support quality. Those matter—a lot. But they're not costs you can easily calculate. I still factor them in, but I treat them as 'risk modifiers' rather than line items.

So, bottom line: when someone says 'Coloplast is expensive,' I say 'show me the TCO.' Because the unit price is just the first number. It's almost never the full story.