Providers, suppliers discuss challenges, opportunities at Market Insights
“There’s no new money,” Jeff Little, Premier national field director for custom contracting and purchased services, Premier Inc., told suppliers at the Market Insights conference last fall in Miami, Florida. “The market is changing, and we have to adapt.”
Given the pressure providers face to reduce costs and improve the quality of care, price cuts alone won’t suffice, he said. Rather, suppliers and providers have to strengthen their working relationships in ways that go beyond price.
Sponsored by Share Moving Media (publisher of the Journal of Healthcare Contracting), the Market Insights conference was designed to help suppliers and IDN executives share ideas on how they can work together to tackle the challenges – and opportunities – presented by the present healthcare situation. Little moderated a panel discussion of supply chain executives on that topic at the conference.
Mark Campbell, vice president of materials management and process improvement, Tampa General Hospital in Tampa, Florida, told attendees that administration is expecting supply chain to help reduce the facility’s cost structure and maintain profitability. Supply chain, in turn, is looking to suppliers for help.
“Reimbursement continues to go down, private third-party payers are following Medicare’s lead,” he said. “We’re looking for partners to help us find opportunities to do something better or different.”
Physicians at Tampa General are one of those partners. “Physicians are much more savvy about reimbursement than they were five or 10 years ago,” said Campbell. “They used to assume that if we charged for something, we would get reimbursed for it.” Now, they are receptive to data about cost-per-case and clinical outcomes.
Suppliers are valuable partners too. “They know they need to supply value analysis with information about their products – the clinical and financial benefits,” he said.
Supply chain as strategic partner
Sandy Myint, executive director of value analysis, University of Miami, pointed out that in her organization, supply chain has escalated into a strategic department. “We are engaged in almost any activity,” she said, including equipment planning for new facilities. “We’re involved in leadership meetings; we help develop strategy; we are involved in the clinical committees.”
Working on projects such as the Comprehensive Care for Joint Replacement (CJR) bundled payment program has extended supply chain’s influence even further, she said. “We looked not only at the cost of goods, but how we use them. Working across the entire continuum of a service line proved to be a good methodology too.” Prior to the project, relatively little was known about costs incurred for patient care following discharge, she pointed out.
“We’re not static; our needs are changing continually,” said Myint. “Suppliers have to ask questions and spend time to get to know us.”
Standalone community hospitals face some unique challenges, and suppliers can help, said Jean Sargent, a supply chain professional who now has her own consulting firm. For example, some small hospitals may not be prepared to implement unique device identification (UDI). But UDI can be a steppingstone to stronger, more strategic relationships between providers and suppliers, she said.
In addition, suppliers often have information about their products and services – such as total cost of ownership or return on investment – that can help providers make good product decisions. “For many years, I’ve gone to my suppliers and asked them to give me those matrices,” said Sargent. “I tell them, ‘You have all that information. If you bring it to me, it makes my job a heck of a lot easier.’”