Publisher’s letter: Supply Chain Complexities

The last few years I have traveled the nation speaking at events, seminars and national sales meetings about the complicated U.S. Healthcare Supply Chain. As our nation worked its way out of the financial meltdown in 2008 – and braced itself for reform – suppliers, providers and communities saw great pressure and strain on the supply chains of our nation’s hospitals and IDNs.

Since 2008 we have seen supply chain leaders take drastic action to ensure their systems stay solvent and persevere through these historic economic and political challenges. They worked tirelessly to reduce spending, drive standardization and educate and influence clinicians trying to moderate utilization.
The influence these supply chain leaders demonstrated during these difficult times and the results they delivered have made them a key component of the leadership team in IDNs from coast to coast. They’ve worked tirelessly to position the supply chain as a strategic piece inside the IDN – not just an operational cost center.

As I write this, we are about 50 days from the presidential election, and just three months from 2013, when reimbursement reform really starts to commence. Regardless of who wins the election, I think we will continue to see our supply chain evolve into more complex systems than in the recent past.
I expect major IDNs to continue to organize into aggregation groups and leverage their GPO contracts, enjoy the benefits of participation in Regional Purchasing Coalitions, engage in direct contracting – and even start their own GPO!

We are seeing it already. Just in the last few months, multiple large multi-state IDNs have announced the formation of wholly owned GPOs. Pretty interesting to think a supply chain leader can be a shareholder of a national GPO, stakeholder in a RPC, orchestrate direct contracts and own a GPO.

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.