Publisher’s Letter February 2010

Sources Say …

Recently I had the opportunity to speak to a few prominent Supply Chain executives from some of the nation’s best-run IDNs. We spoke about internal processes, GPO relations and expectations of suppliers.

When questioned about the internal processes of their organization and the structure of staffing, the linchpin was great people. In these days when technology, management best practices and industry leading practices promise the world, it is refreshing to hear industry leaders repeatedly mention how great their team members are and how it is them that make a difference every day. These executives also mentioned the importance of strong, focused and open-minded leadership at their organizations. Don’t get me wrong, these IDNs and Hospitals embrace best practices, advanced technology and strategic sourcing at the highest level, but it is all for naught if the right people are not in place.

Then we discussed GPOs, and they were very open that they feel GPOs are one tool of supply chain success. There is so much emotion these days around GPOs, largely fueled by the fierce competition between them. Some suppliers feel like it’s the GPOs who are the ones deciding their success. I love hearing IDNs say that it’s how they utilize their GPOs that make them valuable partners. Not just which one they work with.

There were horror stories from these Supply Chain executives of ill-prepared supplier representatives. Some of these stories you simply could not make up, like how one supplier representative hounded an IDN executive for a one-hour meeting, talking for 56 minutes before asking one question. How can a supplier be successful with a Hospital or IDN when they don’t try to understand that organization and its strengths and challenges?

Think of the pressure so many Hospitals and IDNs are under to reduce, contain and manage costs every way possible while downward pressures on reimbursement persist. But I challenge the supplier community that if it truly is an “executive relationship” you want with the providers, you must understand each organizations mission, vision, values and their financial position. And that is just the beginning. Do you understand reimbursement? The organization’s case mix? Their payer mix?

How can you have a relationship with an IDN if you are not conversational in the various aspects of reimbursement? You can’t! So if you really want your organization to be a great partner, please vow in 2010 to educate yourself and your organization and thus truly help our nation’s IDNs and Hospitals.
Thanks for reading this issue of the Journal of Healthcare Contracting!

About the Author

John Pritchard
John Pritchard is the publisher of The Journal of Healthcare Contracting.
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