Healthcare Supply Chain Management Content

Prodigo Solutions Vendor Introduction: Analysis, SWOT, Checklist (Part 2 — Product Strengths and Weaknesses) [PRO]

locum tenens

In our last Spend Matters PRO brief, we introduced you to Prodigo, an 11-year-old provider based near Pittsburgh that is deploying a platform that’s specific to healthcare procurement and contract management. With 20% of the U.S.’s largest integrated delivery networks (IDNs) and more than 30% of Gartner’s top hospital supply chain departments as customers, Prodigo has numerous use cases and a large pile of healthcare-related data on which it has built a strong core product. And although it is not always best-in-class when compared against leading P2P providers that lack a vertical focus, Prodigo’s willingness to target the needs of a specific market have led to some commendable product strengths as well.

Part 1 of this brief provided background on the company and an overview of Prodigo’s offering. In Part 2, we provide a breakdown of what is comparatively good (and not so good) about the solution, a high-level SWOT analysis, a short selection requirements checklist that outlines the typical company for which Prodigo might be a good fit, and some final conclusions and takeaways.

Prodigo Solutions: Vendor Introduction (Part 1 — Background and Solution Overview) [PRO]

healthcare

Rogue spend is a common problem for procurement in all industries, but in healthcare the issue is on a whole other level. Whereas the typical organization can see about 30% of indirect spend that falls into the off-contract category, that number can climb to as much as 60%.

There are multiple factors that drive these rogue purchases. Notably, in healthcare the distinction between direct and indirect spend is less of an issue than the difference between clinical spend (that is directly related to patient care) and non-clinical spend. These categories are managed a little differently from how procurement organizations typically approach direct and indirect purchases. Internal demand for clinical items can vary significantly, and since not having an item in inventory could be a matter of life and death, the need to spot buy specific medical devices or materials isn’t analogous to an ad hoc spot buy that you might find for many indirect spend categories.

Healthcare spend is also nuanced because the requestors — the medical personnel — often have a stronger say in what is purchased and to what degree cost is a factor than procurement gets compared with other verticals. This includes “physician preference items” where a physician MUST have a certain medical device/instrument that is different than the hospital system standard (and hopefully not because the MD is getting wined and dined by the manufacturer or distributor!).

This industry dynamic applies to the healthcare supply markets, as well, where unique features and quirks, including a much higher use of group purchasing organizations (GPOs) and strong influences by medical device manufacturers over how their products are priced and used within hospitals, only further complicate procurement efforts to bring spending under control. Over 90% of GPO revenue is from supplier-funded “administrative fees” (i.e., rebates that are exempted from federal government kickback regulations), and until this commercial model goes away, hospitals still need to automate them (including percentages of those fees shared back with the hospital) and other supply chain requirements such as distributor owned/managed inventory within the system.

These healthcare-specific challenges are well-known to Prodigo Solutions, a purchasing technology solutions company based in the suburbs of Pittsburgh, Pennsylvania. Originally grown out of the UPMC’s needs for better managing its own internal purchases, Prodigo today operates as a standalone software provider, offering tools that support e-procurement with healthcare-specific controls and post-signature contract management and compliance. Its customers include both integrated delivery networks (IDNs) and small community hospitals alike, and its healthcare marketplace currently facilitates transaction volumes in excess of $15 billion.

This two-part Spend Matters PRO Vendor Introduction series offers a candid take on Prodigo and its capabilities. It will include an overview of Prodigo’s offering, a breakdown of what is comparatively good (and not so good) about the solution, a SWOT analysis, and a selection requirements checklist for companies that might consider the provider.

Healthcare Supply Chain Has Its Own Needs, Challenges: An Insider’s View

locum tenens

With companies like Amazon and Walmart trying to break into the healthcare supply chain sector, it’s curious why they haven’t made great strides. It turns out that what works in many supply chains doesn’t automatically translate to the healthcare provider supply chain.

Mike DeLuca, executive vice president of operations at Prodigo Solutions, learned that lesson well from his work at UPMC, a $19 billion healthcare provider and insurer based in Pittsburgh and his current experience serving the technology needs of some of largest healthcare provider organizations in the country that are Prodigo’s clients. DeLuca was able to juxtapose the experiences after working in supply chain for Motorola and Alcoa.

“I naively thought supply chain was supply chain,” DeLuca said, “but what I learned over time is that’s not the case in healthcare.”

Why Well-Run Hospitals Need Tailored Technology to Care for Patients, Business

healthcare

As one of the nation’s largest nonprofit health systems, BJC HealthCare needs to provide consistent, high-quality patient care across all of its hospitals while maintaining operational efficiency. When the St. Louis, Missouri-based healthcare provider began its search to upgrade how it supplies its facilities, it found the healthcare marketplace provider Prodigo Solutions, which knows what hospitals of all sizes need because it provides online shopping and other services to more than half of the top 15 hospitals in the U.S.

Today, BJC uses ProdigoMarketplace to requisition a range of medical items that have been negotiated for price and vetted for compliance. To understand how the Marketplace helps, the staff at BJC answered some questions about working with Prodigo.

At HIMSS, Healthcare Technology Focuses on Telemedicine, Payment Platforms, Cybersecurity for Medical Devices

healthcare

At last week’s Healthcare Information Management Systems Society Conference (HIMSS), technology and medical professionals mainly focused on three areas of advancement and supply chain risk: the latest in telemedicine, the related consumer-driven payment platforms and cybersecurity for connected medical devices.

HGPII’s Report: Medical GPOs Focusing on Cost, Innovation in Healthcare Supply Chains

healthcare

The Healthcare Group Purchasing Industry Initiative (HGPII)’s 2019 annual Public Accountability Report released Thursday found that healthcare's group purchasing organizations (GPOs) continue to advance business practices that promote growth, transparency and innovation. The annual report also explored the sector's ethics.

Sponsored Article

For Hospitals Only (Part 3): How Prodigo Helps Pave Procurement’s Path to Clinical Integration

data

The hospital market in the U.S. is undergoing a significant transformation at all levels. Rapidly consolidating markets, declining revenues and a fundamentally new reimbursement paradigm that links provider payments to improved performance are the current headliners. The latter is a value-based form of reimbursement that holds healthcare providers accountable for both the cost and quality of the care they provide. It’s a data-driven payment system that will reward the best-performing providers and penalize those that don’t measure up. Almost by definition, it’s a system where data accuracy and transparency have become the essential currency for improved decision making.

Traditional silos are giving way to cross functional collaborations, as the clinically integrated supply chain compels it.

In this final installment of our three-part series on Prodigo Solutions, we not only address how the company is helping to solve healthcare’s data standards challenge, but how it has successfully positioned itself to directly support the industry’s drive to clinically integrate its supply chains.

A 2019 Wish: U.S. Healthcare Supply Chain Leadership Will Learn to ‘Just Say No’

My 2019 wish is directed at healthcare’s supply chain leadership. More than encouraging investments aimed at making their supply chains more dynamic, I would like to see the gloves finally taken off and the bullying behavior of major suppliers called out for what it is. To make that happen, healthcare’s supply chain leadership must think more strategically about their supply rationalization strategies across their most important service lines. If for no reason other than to establish balance in important relationships, the effort is essential. Finally, staff must be remotivated to challenge the established order, so programs that reward them for doing it must be instituted, promoted and monitored for results.

The Contingent Workforce and Services (CW/S) Insider’s Hot List: January 2019 (Special Focus Edition on Services) [Plus+]

Welcome to the January 2019 edition of Spend Matters’ monthly feature “The Contingent Workforce and Services (CW/S) Insider’s Hot List,” available to PLUS and PRO subscribers. For those new to the Hot List, each edition covers the prior month’s important or interesting technology and innovation developments within the CW/S space, where change may be accelerating or at least becoming more pervasive.

This edition also marks the first 12 months of Hot List coverage, launched in the February 2018 inaugural edition (and covering January 2018). Our goal was to show that under the surface of the obtuse, clinical label of “contingent workforce and services” (CW/S) was a hotbed of technologically driven innovation. We sought to set the record straight, perhaps turn a few heads (maybe even provoke a double-take) and possibly prevent some unwary practitioners from getting burned. Hopefully we have fulfilled our promise.

To mark the first anniversary of the Hot List series, this month we will leave the usual format behind and seek a glimpse of the CW/S elephant in the room: complex services spend.

The real features of this spend category have (strangely enough) been obscured in the shadow cast by contingent workforce. And while there has been lots of talk about SOW spend in the CW/S world, in reality, that’s been a little bit like lighting a match in the dark to survey the full enormity of the elephant (possibly only seeing a foot or a tusk).

With that, we will now begin our safari, turn our searchlight toward the relatively unexplored territory of services spend and wrestle with questions like: What is it? How is it being addressed in different sectors? Is there a pattern emerging that may mean more and more effective ways for businesses to source and manage complex services?

Sponsored Article

For Hospitals Only (Part 2): How an Internal Marketplace Drives Hospital Standards

healthcare

More often than not, procurement projects that finally make the docket address problems that staff have been complaining about for a long time. Therefore, having a detailed understanding of the problem is essential. To get there, cross-functional input must be solicited from staff representatives of all affected organizational layers throughout the system design and implementation phases.

One thing that successful change management efforts have in common is that they are typically driven by a combination of front-line workers and back-line executives. When this happens, success if virtually assured. When it doesn’t, well, the odds aren’t great, but sometimes we get lucky (according to statistics, about 46% of the time).

In Part 1 of our series on Prodigo Solutions, we talked about the company’s dedication to the needs of hospital procurement organizations and how it has allowed Prodigo to achieve dominant status in its market. From a change management perspective, Prodigo provides a shining example of how desired results can be achieved when we focus ourselves on doing certain things particularly well. As we know, when we don’t, pushback is a certainty.

Sponsored Article

For Hospitals Only (Part 1): Prodigo’s Dedication to its Core Market Continues to Pay Off

Often referred to as “Amazon-like” or the “storefront” application in a P2P suite, Prodigo Solutions’ centerpiece solution is a client-branded, internal marketplace developed exclusively for hospital use. Known as ProdigoMarketplace and complemented by other specialized applications also purpose-built just for hospitals, everything about Prodigo reveals its unmistakable healthcare pedigree. Prodigo’s sole dedication to the needs of hospitals is distinguished and has helped establish the company’s dominance, now boasting half of the nation’s largest and most recognizable health system brands as customers. Prodigo also is one of healthcare’s largest Marketplaces by spend under management — having transformative financial impact on its customers’ supply chain practices and operations.

Coupa-Aquiire Deal Highlights Key Change: Marketplace E-Procurement Models Aren’t One-Size-Fits-All Anymore

marketing

Spend Matters’ recent coverage of Coupa’s purchase of Aquiire details Coupa’s acquisition rationale and the general wisdom of its decision — but the deal also calls attention to a useful context that evaluators of “Amazon-like” e-procurement systems would be well served to understand. As these systems are tailored for different industries, they should be evaluated for how they differ, not how they're the same. Let's look at three types of marketplaces spawned by the Amazon model.