Things to Come in 2016

Welcome to the new normal, where value-based everything is the mantra and goal. It’s hard to argue with. Shouldn’t everything we do be a value-based decision, rather than using legacy decision-making procedures or the great old “That’s the way we have always done it” line?

It just makes sense that if a hospital’s reimbursement is becoming more and more predicated on quality measurements, then how they reward their stakeholders should follow a similar pattern. The executives that find a way to systematically enhance quality metrics should be bonused accordingly. Department heads that move the needle on patient experience should be compensated and rewarded accordingly.

Supply chain leaders that source products and services that increase quality and enhance patient experience should be rewarded accordingly, even if those products increase the spend of the facility.

Yes, you read that right.

It is high time to find ways to progress the value pursuit with an investment – not just demands – to reduce expenditures by Supply Chain.

Looking forward to 2016, here are the topics I see driving the healthcare contracting arena:

  1. Mergers and Acquisitions. Certainly the GPOs are in the headlines with MedAssets rolling into the former VHA/UHC organization now named Vizient. This will be fascinating to watch progress and what it means to Premier and HealthTrust memberships. Intalere (formerly Amerinet) now has new ownership and leadership with a very unique strategy.
  2. Now more than ever it is easy to believe the systems that will thrive in the new normal are integrated with a payer component. I wonder how many suppliers are segmenting their prospect market with systems that also own a payer? It just seems like a smart idea that if the stakeholders have common goals, their chances of success increase.
  3. Alternate Payment Models. As more Medicare funds are at risk due to quality and patient experience measurements, we will see more payments at risk from commercial payers as well. This is the new future of reimbursement and it is getting closer to becoming meaningful every day. I can’t help but think it will extend to the employer too. Will employer’s premiums for their covered lives become a variable cost predicated on the demonstrable value the provider delivers to that payer? How will product selection figure into this equation? Suppliers better understand how they contribute!

These are just a few of the big issues I see for 2016. I am fascinated to see how our nation’s Supply Chain Leaders react and embrace these issues. Thanks for reading this issue of The Journal of Healthcare Contracting.

John Pritchard

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