Seven things I learned at the IDN Summit…
By Ken Murowski, Healthcare Links
Healthcare systems will continue to be strained with reimbursements reduced by 15 to 25+ percent. Their costs will continue to increase with expenses on IT straining their budgets. New wave of IT expense includes cyber security and the potential to explore block chain technology.
GPOs will continue to provide value, as systems do not have the internal support to handle contract negotiations. GPOs continue to evolve by providing a range of consulting services to address the Triple Aim of Cost, Quality, and Patient Experience. For the first time Premier’s revenue through all other sources exceeded the revenue from GPO administrative fees.
New entrants like Amazon and mergers like CVS/Aetna Walmart/Humana will impact the industry but on the surface none of the GPO’s represented seemed to have changed behavior yet. But in other conversations, IDN‘s are in active discussions with Amazon to find more value.
Shift to the alternate site from acute care to home care and urgent care clinics in the community continues. That puts strain on the traditional revenue of IDNs and challenges suppliers to address these different markets. Perhaps that’s the entrée for the disruptors?
Critical decision-making for the future of healthcare systems is climbing up the executive level. There is increased recognition of the value of managing supply chain costs but at the same time, there is a notable shortage of supply chain talent as many of the past thought leaders begin to retire.
Consumerism is growing substantially. Worker out of pocket costs for healthcare are up 70% in the last 5 years! Consumers are looking for options to where, who, and how they get healthcare. IDNs are promoting brand loyalty for patients.
Volume versus value
While it varies across the country, getting paid fee for service is diminishing while getting paid for value continues to grow. Medicare reimbursement cuts are forcing the change. Suppliers need to sell higher in the organization to deliver value beyond price; these decisions are moving to the C-suite. A sales strategy should appeal to Supply Chain, Clinical, and C-Suite, each with different motivations.