Mak­ing a case

Shop­pers pitch sell­ers at an­nual expo

Modern Healthcare - - The Week In Healthcare - Shawn Rhea

Health­care group pur­chas­ing ex­ec­u­tives used the 2010 HIGPA In­ter­na­tional Expo last week to push their ar­gu­ment that GPO con­tract­ing prac­tices pro­vide fair ground for ven­dor com­pe­ti­tion while si­mul­ta­ne­ously tak­ing costs out of the health­care sys­tem.

The an­nual con­fer­ence, put on by the Health In­dus­try Group Pur­chas­ing As­so­ci­a­tion, was held Oct. 25-27 in Or­lando, Fla., and pro­vided ven­dors with an op­por­tu­nity to meet with GPO ex­ec­u­tives. More than 450 peo­ple at­tended this year’s expo.

The event took place roughly a month af­ter the re­lease of a Govern­ment Ac­count­abil­ity Of­fice re­port on GPOs’ fi­nan­cial and con­tract­ing prac­tices. The re­port was ac­com­pa­nied by a mi­nor­ity re­port from Sen. Chuck Grass­ley (R-Iowa), who, along with some sup­pli­ers, is crit­i­cal of an anti-kick­back law ex­emp­tion that al­lows group pur­chasers to col­lect ad­min­is­tra­tive fees from ven­dors that sell their goods and ser­vices through GPO-ne­go­ti­ated con­tracts. Grass­ley has ar­gued that the safe har­bor pro­vi­sion re­duces com­pet­i­tive pric­ing be­cause GPOs earn more with higher prices, and he has in­di­cated that he may push for greater fi­nan­cial over­sight of GPOs.

But dur­ing the con­fer­ence, GPO ex­ec­u­tives pressed their case to ven­dors, say­ing that their busi­ness prac­tices not only pro­vide a level play­ing field for ven­dors to bid for hos­pi­tal pur­chas­ing con­tracts, but also help small and mi­nor­ity sup­pli­ers to get on hos­pi­tals’ radars and com­pete for busi­ness.

“Health­care re­form is not a zero-sum game,” Peter Allen, se­nior vice pres­i­dent of sourc­ing op­er­a­tions for No­va­tion, said dur­ing a panel on GPO-ven­dor re­la­tions. “This is real money that will come out of the hos­pi­tals, and as we look for­ward, we an­tic­i­pate hos­pi­tals hav­ing fewer re­sources and peo­ple to ne­go­ti­ate con­tracts. So, the GPO con­tract will be­come even more cru­cial,” he added.

At least one GPO ex­ec­u­tive, how­ever, prod­ded his peers to ramp up sup­plier di­ver­sity ef­forts as one means of help­ing small busi­nesses be­come vi­able com­peti­tors for hos­pi­tal pur­chas­ing con­tracts. Dur­ing a ses­sion on sup­plier di­ver­sity and in­no­va­tion, La­mont Robin­son, se­nior di­rec­tor of sup­plier di­ver­sity for No­va­tion, urged GPOs to adopt mul­ti­ple mea­sures aimed at ex­pand­ing op­por­tu­ni­ties for mi­nor­ity and women sup­pli­ers. Such mea­sures, he said, should in­clude cre­at­ing men­tor­ing pro­grams and in­cu­ba­tors for strength­en­ing the busi­nesses of di­verse sup­pli­ers and help­ing those sup­pli­ers cre­ate part­ner­ships with large busi­nesses so they can bet­ter com­pete for con­tracts.

“You may have a gap with a large sup­plier where they may not pro­vide a par­tic­u­lar prod­uct, and they can part­ner with a smaller sup­plier who is pro­duc­ing a cus­tom­ized so­lu­tion,” said Robin­son, who noted small sup­pli­ers lack the re­sources to mass pro­duce and dis­trib­ute their goods. “A lot of the so­lu­tions that are com­ing are not com­ing from large com­pa­nies, but the smaller com­pa­nies,” he added.

The ef­fects of health­care re­form on the sup­ply chain also took cen­ter stage dur­ing the con­fer­ence, with sup­ply chain ex­perts pre­dict­ing how leg­isla­tive changes will in­flu­ence what prod­ucts hos­pi­tals buy. Charles Root, founder and pres­i­dent of med­i­cal cod­ing com­pany CodeMap, said dur­ing a ses­sion that hos­pi­tals and sup­pli­ers will need to keep a close watch on the nu­ances of re­form leg­is­la­tion to re­main com­pli­ant with payer re­im­burse­ment re­quire­ments and to max­i­mize their busi­ness op­por­tu­ni­ties.

Root noted, for ex­am­ple, that changes in re­im­burse­ment for lab­o­ra­tory and imag­ing ser­vices will af­fect hos­pi­tals’ pur­chas­ing habits and, as a re­sult, sup­pli­ers’ busi­nesses. But he also said in­creased cov­er­age of pre­ven­ta­tive ser­vices will present new busi­ness op­por­tu­ni­ties for sup­pli­ers who pro­vided dis­ease-screen­ing and pre­ven­tive-care prod­ucts. Root pointed to drug screen­ing as one area of an­tic­i­pated growth as providers work to pre­vent abuse of highly ad­dic­tive pain med­i­ca­tions in pa­tients who are pre­scribed such drugs.

“This is what you call an un­in­tended con­se­quence” in that it gen­er­ates op­por­tu­ni­ties to cre­ate us­able prod­ucts for doc­tors, Root said. “Ev­ery­body is go­ing to take a hair­cut dur­ing the next few years, but you’ve got time to ad­just, and there’s no ques­tion that if you can in­no­vate as a man­u­fac­turer or hos­pi­tal, then those will be the win­ners.”

Robin­son said smaller sup­pli­ers can of­fer so­lu­tions too.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.