Last month, I attended the 2014 Global MedTech Compliance Conference to speak on a panel about compliance challenges in the new purchasing paradigm. While pleased at the opportunity to take my supply chain knowledge international, I was mildly concerned about what kind of reception a GPO exec would get at a device industry conference. The panel wound up being an ideal opportunity to continue meaningful conversations with my MedTech/medical device colleagues about information sharing, business ethics, and transparency in healthcare purchasing.
While stakeholders have varying interests in the supply chain, the common ground we all share is that healthcare delivery is changing globally. Thanks to new technology and the influx of patient data, healthcare has become increasingly measurable. The ability to match healthcare inputs to patient outcomes creates an unparalleled opportunity to marry business and science. Now providers are being compensated for the quality and outcomes of care provided, rather than the volume and cost of patient care. In turn, providers are looking to work with suppliers that are equally committed to evidence-based decision-making.
I told the MedTech audience that the manufacturers that will be most successful under this new model are those that embrace and encourage the democratization of information. In other words, healthcare supply chain is no longer about negotiating lowest price, but about the finding the best value. Suppliers, therefore, must demonstrate the differential value of products with evidence-based outcomes data.
This is why GPOs are more relevant than ever. At the core, GPOs have been driving value in the healthcare industry for years. Sure, GPOs might win business by demonstrating savings, but we are challenged to retain business by consistently delivering value over the long term. One of the ways we deliver value is to evaluate clinical data in order to identify opportunities for improvement. Imagine the power of combining clinical data from providers with evidenced-based outcomes data from suppliers to hone in on the best possible outcomes for patients and providers. This synergy makes the case stronger than ever for medical device companies to work closely with GPOs.
An investment in quality and innovation can be equated with an investment in your customers. And the amount that suppliers are willing to invest should differentiate them in the marketplace. Think about it, if all manufacturers are willing to share outcomes data, then producing the highest quality products sets you apart. This isn’t to minimize the value of relationships between manufacturers and providers, but it encourages more transparency in these relationships. It levels the playing field between purchasers and vendors and further shifts the purchasing paradigm to evidence-based—not price-based—decision-making.
At the end of the day, healthcare stakeholders are all working toward the same thing: quality patient care and improved patient outcomes. And with some regulation of industry business standards and an alignment of incentives, we can all get there.