Not so long ago, there was a number of thriving independent hospital supply chain consultancies. Then something interesting started to happen. The largest of those consultancies were acquired -- one by one -- by some of the industry's largest manufacturers. Not to be left out, the industry's group purchasing organizations and distributors got into the action by either buying other consultancies or starting their own. But how would hospital C-suite dwellers respond to what seemed like an obvious conflict of interest? They welcomed these new arrangements with open arms especially when they realized that these new supplier consultancies could offer them services at little or no apparent cost.
At virtually every turn they were able to undercut the pricing of the few remaining independent consultants who did not have supply contract profits from their clients to use to offset the financial impact of lower consulting fees. Years later, some of those consultancies were sold back to private owners but they were no match for the remaining supplier in-house supply chain consultancies. Today it is getting harder for hospitals to get unbiased supply chain advice and harder to find hospitals that are willing to pay for it anyway.
So what do you think? How comfortable would you be buying supply chain consulting services from your largest product suppliers? Do you think they would give you advice that reduced their sales to your organization even if that would be best for your company?
Is your organization or someone you know looking for a procurement leader or consultant with a deep understanding of the health care industry? If so, please send an email to: leverard@bellsouth. net.
Lynn James Everard