Congress Introduces a Forward Buying Program for Healthcare Services, Well Sort of …

Forward buying can be a smart procurement strategy in the right market conditions. But those who participate in forward buying are able to specify exactly what they are buying. They know what they want and know what they will get. The Congress of the United States, however, wants many of us to pay for three or four years for undefined health care services that we won't be able to access until 2013.

So why is this being done? The healthcare bills before the Congress are all very expensive but the President has set a goal of having whatever bill is passed come in at a price tag of under one trillion dollars over ten years. As written each of these bills would come in well over that so the only way to make the numbers work is to initiate the proposed cuts in year one and have them be in place for the full ten years while new coverage and access would not be made available until year three or four. If you add ten years of cuts to six or seven years of new costs you get to the number you want.

So the question for the reader is: Would you pay a supplier today for an unspecified product that would not be delivered for three of four years?

Does your company have a procurement challenge that might benefit from a fresh set of eyes? If so, drop me a line (leverard (at) bellsouth.net).

Lynn JamesEverard

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