Publisher’s Letter

John Pritchard

The Trump Administration and the U.S. Supply Chain

How will the Trump administration affect the U.S. Healthcare Supply Chain? It’s a question I’ve been asked a lot during the last 90 days. It’s also a question I’ve asked other stakeholders on my Healthcare Supply Chain Radio podcast. However, to date no one has been willing to go on the record with any position of what Trump and his focus on repealing and replacing the Affordable Care Act would mean to the contracting arena for supplies and services. So, I will give you my take!

Here are three things to watch that will have a lasting impact on the U.S. Healthcare Supply Chain.

  • Drug prices will be addressed, and soon. Last year, drug prices increased by 13 percent for IDNs. That growth rate is simply not sustainable. I would look for the administration to have the FDA fast track approvals that could reduce costs, as well as get involved in assuring less shortages.
  • The largest payor – Medicare — will negotiate for products. I think it is just a matter of time before Medicare is negotiating for drugs, then devices, then supply. This will bother suppliers terribly if they do not have a value based, demonstrable and differentiated value proposition. Once this happens, the big insurance companies and employers will follow suit.
  • We will enter an era of “hyper-value.” Ten years ago, it was almost rude to inquire what something may cost, whether it was a patient asking about a procedure or a physician about an implant. Those days are long gone. We will see more transparency and more demand for measurables. I can see the day soon where a provider’s website shows all charges and the variation for using one brand of implant over another.

These are the trends I’ll be watching. What do you think? What do you see changing? I’d love to hear from you.

Thanks for reading this issue of The Journal of Healthcare Contracting.

P.S.: To listen to the Healthcare Supply Chain Radio podcast, visit https://www.jhconline.com/podcast or download it from iTunes

John Pritchard

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