The Healthcare Hub

GHX provides a wide range of perspectives on how greater collaboration and visibility across the supply chain can improve both clinical and financial performance in healthcare.

Tuesday, January 18, 2011

The Road to Reform: Take it Now

As the House of Representatives prepares for tomorrow’s planned vote on whether to repeal the healthcare reform bill, the task remains the same for those responsible for the delivery of healthcare – they must seek new models of doing business in order to cut costs without sacrificing quality. The belief that this is critical to the long-term viability of our nation’s healthcare system, if not the survivability of many organizations, appears to be the one point of agreement in an otherwise highly contentious debate. So, while Republicans and Democrats continue to wage war (although with a much more civil tongue in the wake of the Tucson shootings), and the American public remains split, nearly 50-50, on whether they support the law, I take heart in the fact that the political (as well as legal) uncertainties are not distracting providers and suppliers from the task at hand.

In its 2011 Business Update: “Working Together to Solve the Healthcare Crisis,” GHX reports that healthcare providers and suppliers saved more than $730 million last year alone, simply by automating supply chain processes, improving data accuracy, and connecting to one another through a single exchange. This figure is 10 percent higher than the amount GHX and the global management firm PRTM estimated would be saved and the amount needed for GHX and its members to stay on track toward a goal of taking $5 billion out of healthcare between 2010 and 2014 - when healthcare reform really kicks in.

The word I hear from healthcare leaders on both the buy and sell side of the supply chain is, they can’t wait until Congress, or the courts, make up their minds. At last year’s GHX Supply Chain Summit, Frank Cirullo, chief restructuring officer for NYC Health and Hospitals Corporation, said his biggest fear is: “a political log jam for the next 5 years, and that they (Congress) can’t get out of their way to make these decisions.” More importantly, Cirullo said, “We don’t have the luxury of waiting; we are making changes now,” a sentiment echoed by BD CEO Ed Ludwig at the same event. And as recently as yesterday, healthcare futurist and author Ian Morrison told me that the clients he consults, ranging from the American Hospital Association to major pharmaceutical companies, are already working on their strategic plans to move from a system that is rewarded on volume, to one that has to prove it delivers value, defined as quality care delivered in an efficient manner, to the patients it serves.

The transition, Morrison says, won’t come easy. Work has to be done on a variety of fronts, from technology to culture to operational excellence. A key component will be visibility to data, to truly understand which organizations, clinicians, procedures and products truly drive value. And here is where the supply chain can play a critical role.

Organizations are investing in their supply chains, certainly for operational efficiencies, but in many regards, more for the data. By working together, and with GHX, they are transforming their traditional linear supply chains into a “healthcare supply cloud” that can yield 360 degree visibility into data that impacts both clinical and financial performance.

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Karen Conway

Vice President, Healthcare Value