Healthcare Matters Content

Healthcare Supply Chain Connections: Value-Based Purchasing and Point of Service Compliance

As complex operating structures, healthcare providers have long tended to segregate operations, thinking that by addressing them as disparate tasks they’ll be better able to manage them. One effect, unfortunately, is how this approach often confounds attempts at eliminating variance, regardless of type. To compound the matter, such divisions filter down, even into otherwise functionally integrated operating environments. Procurement and supply chain, despite their convergence, are not exempt. 

Hospitals Can No Longer Afford to Pay the Bill for Increased Manufacturer Profitability

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I recently read a Forbes piece penned by my friend Paul Martyn. Essentially, it took hospitals to the woodshed, pointing out how many of them remain victims of Stockholm syndrome. It’s an unfortunate analogy meant to describe the state of mind of far too many acute care supply chain practitioners. The implication here is that hospital purchasing staffers tend to identify with the goals and objectives of their “captors.” In this case, the captors are the major pharmaceutical and device manufacturers (OEMs).

Healthcare’s Purchased Services Management Problems Expose Contract Management Deficits

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As a super-category of spend, purchased services continue to pose challenges that are felt across all industry. Although there’s a well-known playbook (i.e. get your data-act together; benchmark; rationalize suppliers and source better arrangements), what is it about purchased services that continues to confound our best efforts? Among healthcare providers — an industry that is just now learning to take control of its supply chains — it has been exposed as a huge problem.

Walmart is Scaring U.S. Healthcare Providers — For all the Right Reasons

Although he surely wasn’t the first to point it out, Warren Buffett grabbed the market’s attention when he described healthcare as a “tapeworm on the U.S. economy.” In fact, his voice carried enough weight to trigger a stock market selloff. Interestingly, not even Walmart’s actions, along with those of other major retailers, have garnered similar attention. Combined, they have quietly opened thousands of healthcare clinics for the past several years. But unlike CVS, Rite Aid, Kroger and other pharmacy and grocery chains, Walmart has effectively positioned itself as a true primary care provider, capable even of treating patients with chronic diseases.  

The Medical Device Reprocessing Industry: Will the Third Time be the Charm?

Alfred Hitchcock provided a great definition of the difference between surprise and suspense. It goes like this: If a bunch of guys are playing poker and a bomb goes off under the table, that’s a surprise. If, however, we know that the bomb is there and we watch the timer tick down while the men play on, that’s suspense. When Warren Buffett said that the ballooning costs of healthcare “act as a hungry tapeworm on the American economy,” the financial markets acted like a bomb went off and the media covered the story like none of us knew it was there. Let me save you the suspense: egregious profiteering in the medical-industrial complex is the head of the tapeworm that Buffett spoke about.

Healthcare: Fix What’s Broken vs. Repeal and Replace

These days especially, there’s an unlimited supply of hotly politicized topics perfectly suited to make sure we talk past each other — and learn nothing. Healthcare provides numerous examples. For example, President Trump got a rise out of the Brits last week tweeting barbs at its beloved National Health Service (NHS), a topic which, by his own account, he knows little about. Trump zeroed-in on a recent NHS protest and sparked a backlash saying that the “NHS is going broke and not working.” The protest he referenced, interestingly enough called “NHS in crisis: Fix it now,” was organized by the People's Assembly and Health Campaigns Together. The movement is supported by most all of the U.K.’s largest unions.

Healthcare Matters Merges with the Mothership

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Healthcare Matters is merging with Spend Matters to allow healthcare procurement and supply chain professionals to find industry news, updates, relevant insights and knowledge in a central location on a single site. Healthcare Matters content will now be found on spendmatters.com under the header Healthcare Supply Chain Management.

Taming the Tapeworm: Even Amazon Needs a Little Help

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As reported earlier this week, Amazon, Berkshire Hathaway and JPMorgan have announced a partnership to cut health costs. Apparently, the partnership won’t be Amazon-led but rather an independent company that will operate “free from profit-making incentives.” What does that mean? My best guess is that the new entity will deliberately bear no resemblance to the current group purchasing organization (GPO) supplier-paid fee model.

Healthcare Consumerism: Supply Chains that Follow the Patient Home

There’s been a lot of talk about “healthcare consumerism” lately. Is it really about increasing competition among insurance providers? As the acute care market continues to consolidate and vertically integrate, aren't the insurance pickings for most of us getting conspicuously slim, especially if employers are making our coverage decisions? Here’s where I’ve landed: If healthcare consumer advocates are relying on insurance companies to drive “consumerism,” then they’ve put the cart before the horse. My money is on the jockey, and the jockey in this race is good old-fashioned consumer preference.

U.S. Healthcare Needs Private Equity

The Wall Street Journal is reporting this week that two major hospital systems, Ascension and Providence St. Joseph Health, are in merger talks. If the deal goes through, the combined entity would include nearly 200 hospitals across 27 states with annual revenues of about $45 billion. The combination would surpass the current largest U.S. for-profit hospital operator, Nashville-based HCA Healthcare. Proponents of the deal say the move could add supply chain efficiencies, eliminate operational redundancies and reduce unnecessary spending.

The Specter of Amazon Rx

Shares of Rite-Aid and CVS initially plummeted on rumors of Amazon’s possible move into pharmacy. Surprisingly, however, their stocks prices have recovered of late, trading places with major medical distribution companies McKesson and Cardinal Health. With rumors of Amazon lurking, it was apparently their turn, as McKesson and Cardinal share prices have recently hit the skids. First grocery, an $800 billion business, then drugs, about a $500 billion business, and now medical products?

Old-Fashioned Heuristics: Common Sense Cause and Effect

Regarding the countless examples of reckless government spending we like to mock, I stopped caring a long time ago. Instead, I have turned my attention to the funding of studies designed to confirm things that we should have already known. If you have a sense of humor, there are numerous ridiculous examples where taxpayer money might have been invested more judiciously. Spending more than a billion to confirm that the use of seat belts saves lives comes to mind, as does funding a long-term study to determine whether obligatory handwashing might be a good idea in health care settings. Studying hospital behavior to determine if they might be playing self-serving games with the current reimbursement calculus also strikes a chord.