Healthcare Matters Round-Up

Physician Owned Distributors (PODs) -- Opportunity or Liability? -- Should surgeons be allowed to earn additional profits from the devices they use? Hospitals need to answer that question and SCM professionals need to drive the defining discussions and enforce the resulting supply chain policies. For SCM professionals seeking to standardize physician preference items (PPI), collaborating with staff physicians who have a financial interest in a medical device or distribution company presents a rare opportunity to crystallize a more balanced relationship.

"Stay Hungry, Stay Foolish" -- Steve Jobs -- Hearing about Steve Jobs passing yesterday caused me to pause for a moment. I'm not going to say that it hit me as hard as the news of John Lennon's death (I'll never forget that), but it surprised me that I actually did feel the news in the same general region of my gut. Maybe for me, it's some sort of getting old, mortality kind of "thing." And that's fine, if that's a big part of it. But what I do know is, we just lost one of the few high profile and authentic geniuses of our generation.

Top Three Gross Margin Leaders in Healthcare Information Technology (HIT) -- The following three companies are reported to have the highest gross margins (percentage based) in the healthcare information technology sector. I thought the distribution was fascinating. For example, Cerner's market capitalization is approximately $11B; MedAssets fluctuates around $600M; and Simulations Plus is not quite $50M.

Where There's Chaos There's Cash – Private Equity (PE) Surging in Healthcare -- If Sir Richard Branson, Virgin's famous CEO, was a classically trained surgeon who gave up practicing medicine in favor of rolling up poorly run hospitals, fixing and reselling them to PE firms who then took them public, he would be Mr. Ralph de la Torre. de la Torre's resume is exhausting -- just to read. He is an increasingly well-known healthcare entrepreneur who has adopted a simple philosophy that is noteworthy only because hundreds of billions in surging private equity investments are lining up behind it.

Purpose-built Procurement Apps -- Skip Ahead to a Best SCM Practice for PPI -- I still remember pitching the power of CombineNet's sourcing optimization to FreeMarkets (circa 2000). To my surprise, FreeMarkets, the company credited with taking reverse auctions online and delivering them to the mainstream, had no real interest. It had hoped that the optimization engine could be licensed separately and that it could be easily and quietly plugged-in to its RFx platform, a product called QuickSource, to speed up the analysis phase of the process for its customers. Because everything was still so new, it wasn't interested in any more "big ideas" and sourcing optimization was precisely that.

ED or Low T -- What's a fella to do? -- With renewed vigor, the pharmaceuticals are spending billions -- all over the world– branding new drugs to a point where patients are now, more than ever, asking for their drugs by name. Using all forms of media, these fully integrated DTC (Direct to Consumer) drug campaigns are working beautifully. That is, in every developed country where they're actually permitted.

-- Brianna Tonner

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