When suppliers for healthcare systems have an increase in cost, or are not generating acceptable shareholder returns, they simply raise prices. Healthcare systems are contractually and legislatively forbidden to charge for services beyond contractual limits. These market dynamics combined with the rising cost of products, supply-chain inefficiencies, staffing shortages, and the annual growth rate in senior populations, have caused significant cutbacks in patient care and related healthcare clinical services (revenue).
In every market the earliest targets of innovative technologies are the largest companies seeking more efficient business solutions. Healthcare is no different. The largest group purchasing organization’s (GPO’s), distributors, resellers and manufacturers are targeted from every direction promising solutions. Because healthcare systems do not have the disposable dollars others do, they are often left out in the decision process when identifying the benefits of innovative technologies.
For the most part these innovative technologies provide ways for service and supply companies to trap healthcare systems in purchasing only their products or services. Healthcare systems are now realizing that proposed solutions delivered through (GPO’s), distributors, resellers and manufacturers do not provide the innovative solutions needed by most healthcare systems.
Investments to date in healthcare technology initiatives exceed the amount of transaction revenue expected in any reasonable revenue model or contractual term. In fact, a conservative estimate of reported burn rates from (GPO’s), distributors, resellers and manufacturers exceeded $100’s of millions of dollars.
Healthcare systems should be asking ask why technology initiatives spend more capital than can be recovered in any reasonable amount of time. Is it to sell more products with less competition? This misguided delivery of technology initiatives is why supply-chain technologies from (GPO’s), distributors, resellers and manufacturers have failed to create significant benefits. Healthcare professionals are now demanding self-directed empowerment initiatives with proven results.
Medical Supply Chain empowerment initiatives can provided substantial results and savings in excess of 40% on supplies and 80% on technology initiatives. Healthcare systems urgently need empowerment tools delivered through a neutral source with the ability to execute fundamental supply-chain rules and best practices. Medical Supply Chain has developed these initiatives in support the healthcare systems and markets lending control of over their contractual relationships and eliminating internal and external supply-chain inefficiencies.
In other industries supply-chain activities not only revolutionize how products move through the supply-chain but also how sellers and buyers collaborate with each another. Healthcare markets have yet to embrace true supply-chain fundamentals and as a result have not begun to reap the enormous benefits and financial savings. As supply-chain initiatives continue to evolve in healthcare markets, the focus for many healthcare systems will be non-intrusive self-directed supply-chain initiatives. To discuss your future supply-chain initiatives, contact us!