Publisher’s Letter May/June 2006

Great Minds

In each issue of The Journal of Healthcare Contracting we have a feature article called Model of the Future. We try to explore the minds, best practices and processes of leading IDNs and their executives. This is always one of my favorite articles in the magazine because IDNs are so unique and all seem so different from each other. Below, I have summarized a few that I think truly show the best minds and practices at some of our nation’s leading IDNs.

The University of Alabama at Birmingham Health System contracts direct for high physician preference items and diligently measures contract compliance (“UAB Health System — Making things easier for the vendor,” January/February 2005). UAB Health Systems $135 million supply spend is spent very deliberately through Novation, Amerinet and direct contracts. This shows how many supply chain success recipes are possible.

The Cleveland Clinic has realized over $66 million in savings over the past 5 years by using reverse auctions and helping vendors increase market share to the Clinic in return for cost savings (“Cleveland Clinic Follows Many Paths to Cost Reduction,” September/October 2005). Sounds simple enough, but when you really think about how you coordinate these processes for a world class 14-hospital IDN, it’s fascinating.

Tallahassee Memorial made a business case for patient safety (“Neighborhood Watch,” March/April 2006). Inherently we all know that increased safety for patients is better business, but how does a hospital go about systematically ensuring higher levels of safety for its patients? Tallahassee Memorial has made great strides with help from its GPO, VHA, and driving a culture change where patient safety is considered in every aspect of care.

In this issue we cover what I consider a real supply chain shift. Much of what we explore is greater efficiency or productivity with current standard practices. In this month’s Model of the Future on page 32, you will learn how LeeSar is assembling its own surgical kits. It is actually procuring pre-sterilized components from Kimberly Clark and building trays to the liking of their attending physicians. Initial analysis shows they have greatly enhanced physician satisfaction, decreased costs and reduced dollars in inventory.

The evolution of LeeSar from direct contracting to self-distribution to assembly is truly a pioneering strategy. Where could it end? Will IDNs and its physicians start specifying products for suppliers? Will other IDNs follow to control their own supply chain destiny and in pursuit of lower costs?

It will be interesting to see the answer to all those questions. I would love to hear from you what you think! Feel free to let me know at (770) 263-5262 or via e-mail at

As always, enjoy 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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