Category Archives: Healthcare Matters

Prodigo and Healthcare – Customer Case Studies and Applying Lessons Learned to Cross-Industry Procurement

medical chart

Prodigo, a procure-to-pay (P2P) technology specialist in the healthcare market, has a lot to offer procurement organizations. We began our discussion on the provider in Part 1 of this multi-part Spend Matters PRO research brief. Today, we share stories from Prodigo customers who we have had a chance to speak to and who are supporting highly complex transactional procurement environments. These customers have confirmed the complexity of the environments that our briefings and demonstrations here at Spend matters have suggested. For example, one customer has seen all internal item master information become part of the Prodigo catalog. But the Prodigo system is also used to index and manage external information for direct purchases from manufacturers (enriched with third-party data as well) because the internal item master doesn't carry all the items or the information necessary to make frontline decisions. This may sound simple, but the use case and complexity is surprising indeed to provide complete buying transparency and control – and bring a range of lessons learned for non-healthcare procurement organizations as well.

Cross-Industry P2P Lessons From Healthcare, Courtesy of Prodigo

Solution

Occasionally, a procurement technique or solution approach we see in healthcare potentially brings broad applicability to other sectors as well. We’ve learned over many years that most solutions in this market are highly bespoke given all the challenges associated with managing complex (and specialized) product information, physician preference items, billing and reimbursement and attributes unique to hospital and clinician environments. But a recent set of briefings, demonstrations and customer reference discussions with Prodigo Solutions, a procure-to-pay (P2P) technology specialist in the healthcare market segment, suggest a range of lessons from healthcare environments that we can apply to more generalized purchasing environments. This 2-part Spend Matters PRO research brief explores Prodigo’s capabilities, the customer experience and what procurement can learn from healthcare.

Attacking Costs in Healthcare: Tactical Procurement Can Address Up to 40% of a Total Operating Budget

Group-of-surgeons-looking-at-patient-on-operation-table--01171430A44DB964

There’s often a mistaken viewpoint that says labor costs form the dominant and often hard to address costs of healthcare service delivery in the United States (for example, the physicians, nurses, administrative staff). Granted, labor costs are a significant and core component of healthcare. But so are capital expenditures as well as overall procurement. In fact, a recent article, “7 Reasons to Merge Revenue Cycle and Supply Chain Management,” cites research from the Health Sector Supply Chain Research Consortium at Arizona State University (HSRC-ASU) that suggests the potential impact better procurement can have.

The Hospital Revenue Problem, and How Better IT Cost Control Can Help

Spend Matters welcomes a guest post written by Jon Winsett, CEO of NPI, a spend management consultancy, focused on eliminating overspending on IT, telecom, and shipping. Last week, Moody’s Investors Service released a dismal report on the financial state of nonprofit hospitals. For the second year in a row, revenues have declined and their rate of revenue growth has reached historical lows. The trends that are driving this downturn reflect a rapidly changing healthcare payment ecosystem – including low rate increases from commercial payers, more reimbursement cuts from the federal government and more high-deductible health plans contributing to bad debt. […]

GPOs: An Emergency Response Role for Sourcing and Procurement

When it comes to group purchasing organizations (GPOs) in healthcare and beyond, most procurement professionals first think about how such organizations can potentially bring value through leveraged contracts/agreements. Yet GPOs are fighting to differentiate themselves and their value in new ways. Over on HC Matters, our sister site, we recently ran a guest post by John Sganga exploring how GPOs can bring value in cases of emergency response. We reprint some of the salient learnings below, which we believe extend outside just the healthcare industry: GPOs excel in two areas that make them uniquely qualified for emergency response efforts: relationships […]

3PLs Move Into Healthcare Supply Chain

Today, we thought we'd feature a recent post on Healthcare Matters: Third-party logistics firms (3PLs) are essentially travel agents for freight. They generally do not own transportation equipment, but instead buy capacity from the carriers who do –the truckers, railroads, steamship lines, or cargo airlines, and then mark it up and resell it to the shippers. The cost of purchased transportation is highly variable for 3PLs because they primarily buy capacity in the spot market. As a result, in periods of macroeconomic weakness when capacity loosens and carrier pricing falls, 3PLs can pass those declines to shippers on a lag, […]

The Elusive Group Buy: GPOs, Healthcare and Beyond (Part 2)

In the first post in this series, we examined how healthcare GPO provider Premier is tackling group-buying opportunities and the success it has realized for members above and beyond the standard leveraged pricing that GPOs typically provide. Yet to make group buys work, as my colleague Tom Finn on Healthcare Matters observes, technology is what can (and will) form the basis of making this technique a more frequent (and successful) means of negotiating optimal pricing, terms and service levels with suppliers. On the most basic level, the following requirements are necessary to enable group buys through technology-automated approaches (note this […]

The Elusive Group Buy: GPOs, Healthcare and Beyond (Part 1)

The concept of group buying is one that many seasoned procurement buyers and managers often get excited about, given the leverage such an initiative might bring in getting suppliers to sharpen their pencils (and ideally improve service levels). Yet the number of effective group buys (different from leveraged contracts!) are tiny in the scheme of overall corporate spending. Might this be changing? Over on HealthCare Matters, my colleague Tom Finn recently covered Healthcare GPO Premier's Success with Group Buying Initiatives. Noting a recent Premier announcement on its program, Tom captures the elements of the news from the announcement: "Traditional group […]

HC Matters: GHX Customers = SCM Leaders, Premier’s “Group Buy” Saves $165M, Healthcare M&A

Here's what Tom Finn has been up to over on Healthcare Matters this week. SCM Capabilities Drive Imperial Holdings Move into African Healthcare -- Imperial Holdings is a diversified industrial services and retail group with activities spanning logistics; car rental; tourism; financial services; vehicle distribution and retail. The holding company operates primarily in South Africa, Africa, Europe and Australia; it is listed on the Johannesburg stock exchange (JSE); the group is highly decentralized in its management structure and operating principals. And today, this company of 40,000 employees announced that it would buy the pharmaceutical and consumer healthcare supply chain services […]

Healthcare Matters Round-Up

Another Hoax: Samsung Did Not Pay Apple in Nickels -- I have to admit it. When my daughter informed me with a "guess what Dad, Samsung paid Apple its billion dollar fine in nickels," I actually fell for it. Naturally, I first questioned her hard, but she's a smart kid and not prone to believe everything she hears. And definitely not gullible... Ascension/Marian Merger Reflects Industry's Appetite For Consolidation -- Ascension Health Alliance, the parent organization of Ascension Health, announced an agreement late yesterday to acquire Tulsa, Okla.-based Marian Health System, which operates 36 hospitals and 150 clinics in the […]

Best of Spend Matters: Healthcare Matters

We've hit the official dog days of summer. For Jason's last official week of vacation, we'll be featuring a "Best of" series every day this week. Have no fear: after Labor Day, we'll be revived and ready to hit the ground running! How Much Does Your Doctor Make? -- There's an old joke about a housewife who complains about the $175 she just paid her plumber. Briefly, when she sees her plumber's bill for fixing a leaky faucet, she grumbles and says: "I paid less than half of this the last time I visited my doctor." The plumber responds, saying: […]

Procurement Fighting the Good Fight: Benefits Sourcing and HR Complacency (Part 2)

Please click here for Part 1 of this post. This content is based on the research, analysis and opinions contained in the following Spend Matters Perspective: Human Resources & Sourcing Turf Wars -- HR Departments Lose their Prescription for Sourcing Immunity. When it comes to opposing the HR and HR benefits consulting firm status quo, our above-linked analysis suggests that the big players (IBM, Deloitte, Claro Group, Accenture and Paladin Associates) are now entering the HR benefits procurement game by applying pressure from the top down, promoting their abilities to more effectively source such benefits and/or broker arrangements with other […]