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Health care continues to be seriously challenged by the staggering reductions in government-based and managed care reimbursement caps, growing staffing shortages, increase in regulations (such as HIPAA) and the annual demand fueled by the rapid growth in our senior population. Yet one of the least talked about challenges impacting health care is one of the most complex and troublesome. Health care must overcome years of adversarial relationships with suppliers and dramatic internal and external inefficiencies. In addition, the GPO's need to decide whose side they are on: the health systems or the suppliers, who are their primary source of revenue.

In other markets supply chain management has revolutionized not only how product moves through the pipeline but also how buyers and sellers relate to each other and form long-term value based relationships. Although aggregating volume through GPO's was originally intended to drive price reduction it has produced an unintended consequence. As large suppliers increased the size of their market share through merger and acquisitions, they dramatically increased their leverage significantly reducing the markets ability to lower cost. The only way to overcome this dynamic is to provide health care with the solutions they need to regain control over costs and exploit supply chain efficiencies.

Health care has not yet embraced fundamental supply chain rules and as a result has not realized the benefits. The many failed attempts to introduce e-commerce into the health care market are the latest examples of how suppliers use their influence and market power to artificially inflate cost. This limits the use of technology their customers desperately  need. Of the surviving e-commerce companies almost all are simply misleading efforts from suppliers to maintain market dominance. At the expense of millions of Americans GPO’s, manufacturers and distributors have failed to deliver the solution that is needed most ( "Self-Directed Supply Chain Initiatives”). When this occurs supply chain value will find its way into health care and only then will the layers of cost and inefficiencies be removed. Isn’t it time you plugged into the solutions that deliver supply chain empowerment?

 

"MSC Is The Answer To Artificially Inflated Healthcare Cost"

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