Publisher’s Letter July/August 2005

The Power of 10

In this second year of publishing The Journal of Healthcare Contracting, our “10 People to Watch” issue has become one of my favorites, as well as a reader favorite. The Q & A format allows the selected 10 People to discuss those aspects of the contracting arena that are on their minds.

This year, a number of common themes were prevalent, with two standing out as pressing issues: the importance of compliance in the contracting process and the challenge of contracting for physician-preference items.

The need for having physicians and clinicians intimately involved in the contracting process is by no means a new challenge. But, it is absolutely necessary to gain high levels of compliance. I am sensing and hearing that the better contracting departments have been able to successfully engrain physician involvement into their processes.

I recently asked a good friend of mine at a major GPO what the single biggest deterrent to contract compliance is and, without a moment’s hesitation, he said it is that of “clinician practice patterns.” It’s great to see this challenge being addressed aggressively by the more progressive IDNs.

Contracting for physician-preference items, such as orthopedic products, drug-eluting stents and cardiac defibrillators, is what seems to be keeping our contracting leaders up at night. Much market tension exists, because IDNs are seeing the manufacturers of these products present double-digit price increases and achieve great returns to their stockholders, while reimbursement still fails to completely cover the cost of these medical technologies.

The physicians and clinicians, again, play a huge role in the success of these highly preferential items. Manufacturers’ influence on physicians to use these products puts great strain on the executives managing the IDNs’ contracting strategy.

It will be interesting to watch as the GPOs, IDNs and manufacturers work hard to assure these technologies are available to the patients who so dearly need them without compromising the financial well-being of the IDNs.

Please enjoy this issue of The Journal of Healthcare Contracting.

John Pritchard About John Pritchard

John Pritchard is the publisher of The Journal of Healthcare Contracting as well as The Major Accounts Exchange (The Max).

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