Think Ahead

Market Insights forum challenges supply chain leaders to consider what’s to come

A picture of healthcare – specifically, the healthcare supply chain – of today and tomorrow emerged from the two-day Market Insights Supply Chain Forum in Dallas, sponsored this fall by the Journal of Healthcare Contracting. That picture included shades of consolidation, value-based reimbursement, and – not surprisingly – cost control.

Joel T. Allison, FACHE, president and CEO, Baylor Scott & White Health, described the IDN’s “Vision 2020.” Allison envisions Baylor Scott & White becoming a top healthcare system, “strategically positioned as a fully integrated delivery network for providers implementing population health.” It is well on its way, he said, pointing to Scott & White Clinics, Baylor Scott & White Quality Alliance, HealthTexas Provider Network and other initiatives.

Three healthcare models are emerging, said Allison:

  • Super-regionals, including Baylor Scott & White.
  • Academic aggregators, such as Partners HealthCare.
  • Nationals (e.g., Tenet or HCA).

The “winners” will be those providers that understand consumers, the significance of patient experience, and the move to “retail healthcare,” he said. Care coordination throughout the continuum will be another marker of success. Expect telehealth and telemedicine to take off, particularly as new payment models emerge. And capital will be largely directed to health systems’ ambulatory strategies, including physician practices, retail clinics, and urgent and emergency care.

There’s a new normal in healthcare – a relentless focus to reduce the total cost of care, said Brent Petty, consultant, Lexmark International, and former IDN supply chain executive. As much as 25 percent of total U.S. healthcare spending – or about $750 billion – is wasted, he said. Unnecessary services, excess administrative costs and inefficient care delivery are at the top of the list.

Key areas of focus will be:

  • Cutting direct costs (e.g., FTEs, drugs, services).
  • Reducing variation of care.
  • Leveraging size to negotiate better pricing.
  • Increasing operational efficiencies.
  • Value-based purchasing.
  • Physician engagement.
  • Creating value through population health management.

Vendors need to help out, said Petty. They must understand the clinical and economic impact of their products.

A new way of talking
Poor communication. Broken promises. Transactional nature. Too often, those were the hallmarks of supply chain relationships, said Sean Poelinitz, director, contracting and resource utilization, supply chain management, CHRISTUS Health. But that’s not good enough anymore. Rather, we should be building strategic relationships with our trading partners, he said. They are long-term; they thrive on mutual benefits; and they call for shared resources, open communication, shared risks and rewards, and senior leadership involvement.

Do you know a strong strategic supplier relationship when you see one? Look for these clues. In such relationships:

  • Selection of the relationship must be defensible.
  • The relationship must be exclusive but not entitled.
  • The relationship must be measurable with a formal rewards/recognition process.
  • The relationship must be intentional.
  • The best aspect of the relationship is replicable to the supplier community.
  • Expectations for the relationship must grow.