Publisher’s Letter: The Pursuit of Meaningful Partnerships

John Pritchard

John Pritchard

I have attended several industry meetings recently where IDN Supply Chain leaders coached suppliers on how to best work with systems. The ever-elusive pursuit of partnerships is always a hot topic to discuss, but an ideal rarely attained. It seems simple enough to align expectations, communicate business objectives and then construct a business plan that is regularly reviewed and measured. I think the timing is right to really push for meaningful partnerships.

IDN Supply Chain departments are hiring more and more professional strategic sourcers. Whether they are MBAs out of our nation’s best business schools or seasoned professionals from automotive, energy or electronics, we are seeing a true commitment to bringing the best and brightest talent into the industry. I sat in one presentation by a well-known health system leader that detailed the exhaustive two-year training and mentoring program all new Supply Chain directors have to go through when they enter his department.

Suppliers, on the other hand, almost always seem shorthanded when dealing with complex health systems. The skills these suppliers need in people is escalating.

Take a look at Novation/VHA’s acquisition of MedAssets. You now have two of the nation’s four largest GPOs rolled into one organization. Until the contracts are merged, this will be more complex for suppliers to handle than it would have been when they were autonomous organizations. Roll in the fact that many of their members are doing local contracting and regional aggregation, and it screams that suppliers need better people to work with complex organizations.

I have worried in the past that for-profit, publicly traded suppliers and non-for-profit, community minded health systems had too divergent of objectives to partner in a meaningful way. This is still a concern, but these last few year I’ve witnessed the biggest and most progressive systems focusing on running lean, efficient and aggressive organizations. This should indicate they are capable of being a good partner to our nation’s suppliers. This pursuit of efficiency comes from the era of reform and drive for financial sustainability.

As our nation’s systems continue to get bigger, the stakes for suppliers are raised, but the climate is right for attempting true partnerships. I am hopeful we will start see some meaningful buyer-seller relationships. I’d like to see some risk-sharing activity that truly shares – and not shifts –risk. I also think we will start to see larger systems source by specification, where they order product from suppliers specific to what they want or need, and not just what the supplier is offered.

I would love to hear from you on some of the more meaningful partnerships you may have or are working on. E-mail me at jpritchard@mdsi.org

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

John Pritchard