Q. As a Corporate/National Accounts person, how can I be more successful in the IDN/GPO contracting world?
A. You are responsible for your own success. The essence of marketing is to find the way around barriers. Keep opening doors. Get personal referrals and introductions. Stop making one-off sales calls. Push for strategy and consistency.
Q. In regard to channel friction, is it getting worse? Are GPOs getting adversarial?
A. Consolidation at all levels across our industry is intensifying competition and innovations are more disruptive than ever. Technology will forever change the nature of all work. All segments are grappling with relevance to varying degrees and that puts people and companies on edge; I would not single out GPOs in particular.
Q. How do suppliers navigate duplicative channels? (think of Dignity, Ascension, Northwell, etc.) They are shareholders of GPOs, members of RPCs, direct contract, self-distribute AND want suppliers to be low-cost suppliers. Is this tenable?
A. There are dozens of ways I can purchase a ticket on an airline or buy a book. At the end of the day, your product and/or service has to have a unique and well thought out value proposition. Hyper-competition is here to stay and companies must be relentless about being competitive. There will always be inefficiencies in less than perfect markets. That said, there is room for great improvement. Have you studied Medline lately?
Q. What is the future of contracting? GPOs, IDNs, RPCs? What you see in my crystal ball?
A. Buyers should abrogate contracting for pure commodities to the most efficient vehicle. Too much time and effort is being spent on redundant activities and VAC processes and meetings. 5000+ hospitals should not be worrying about purchasing and contracting for pure commodity products.
Supplier and provider consolidation will make big winners and big losers…as a supplier, you cannot afford to be outside looking in. Providers will struggle with consolidation as market and technology move care to alternate locations. Additionally, some systems will become dis-economic and struggle with large overhead costs.
Tax status of not-for-profits will continue to be under close scrutiny from local, state and national taxing authorities.