Publisher’s Letter May/June 2005

Knowledge is power; trust is key

I think Sir Francis Bacon had it right. Knowledge is power. But in today’s business world, trust is certainly key.

The leverage of knowing something that someone else doesn’t know can be powerful. I think it is the primary reason we struggle in the contracting arena to achieve collaboration. Whether it’s regarding pricing, unit volume, part numbers, cross-references or inventory status, when one stakeholder knows something and doesn’t, or can’t, share it with his trade partner, the partner is disadvantaged. At every friction point of the contracting arena, there is an imbalance of knowledge leveraged for an advantage to the holder of that knowledge.

Think of a supply chain manager speaking with a physician about standardizing physician preference items, like orthopedic implants, stents or pacemakers. Just when the manager thinks he has built a portfolio of acceptable options, the physician purports a new technology introduced to him by a supplier’s sales representative (and the manager has yet to be told about the new product).

In this issue, we discuss how technology enables contract compliance. It seems systems and processes are not only available, but also are in use in many of the nation’s best health systems. You’d think it would be comforting to know technology platforms exist to help health systems aggregate utilization and use their healthcare contracts for supplies and services. For years, people have called these systems the last piece to the puzzle. I think a very important piece is still missing: trust.

I know so many great people at IDNs, GPOs, suppliers and distributors, all with the best intentions to have high compliance of what they freely put under contract. And it’s disconcerting to have technology systems in place to facilitate contracts, yet hear from people who are disappointed with the compliance levels they are attaining.

Our market needs more trust. Trust can only be enjoyed when good, honest people have aligned objectives. In the supply chain, repeatedly we see stakeholders’ disparate objectives drive actions that are detrimental to a supply chain partner. And right now, not all stakeholders have the same objectives, so leverage seems to always be welcomed.

Knowledge is power. Power is an awesome responsibility that needs to be handled cautiously. I have never heard of great collaboration or partnerships commencing from a leveraged relationship. My hope is that someday soon, trust between trade partners will be prevalent enough to allow these great technologies to facilitate efficient transactions, as they were designed to do.

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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