December 2018 | ASPI
This newsletter from Access Strategy Partners Inc (ASPI) is designed to supplement your thinking about the vast changes occurring along the Healthcare Supply Chain—and how to capitalize on them!
The healthcare supply chain continues to reorder itself in today’s market — that is not new news to anyone involved. Keeping your strategy, tactics, and objectives current has likely never been more difficult. ASPI wants to provide you with food for thought we hope you’ll find useful — and hear from you when you agree or disagree with our assessments.
Operating in today’s healthcare supply chain is not for the faint of heart, but with solid planning and execution leaders can thrive—not simply survive. ASPI is about thriving—for our customers and our clients. Please let us know what you think about our inaugural issue by emailing our editor, John Strong, at email@example.com.
Amazon. Bigger health care systems. Larger suppliers. Mergers and acquisitions. These days it seems like “bulking up” is on everyone’s minds to try to remain competitive. In 2017 deals like the acquisition of C. R. Bard by Becton, Dickinson and Company and the acquisition of the Covidien product lines from Medtronic by Cardinal Health caught big headlines.
Much of today’s medical innovation and technological advances are not from these big companies. They are acquired from small and mid-sized entrepreneurial companies looking for a chance to themselves become profitable and successful companies. In addition, over the past year or two some large, well-known companies have combined into even larger companies.
The chart below highlights how some of the largest global healthcare suppliers have grown through acquisitions, large or small, over the past five years.
While it is usually easy to argue that efficiencies can be gained in “SG & A” (sales, general and administration) expenses, we question how much of that value gets passed along to customers like you on a regular basis. Many companies on this list are still enjoying double-digit revenue growth as well as double-digit increases in net income.
Our question is what all this is doing for the competitive landscape nationally, as well as how small and mid-sized manufacturers can gain entry into today’s market. Some of the unintended consequences of product standardization and product bundling by some of these companies are causing a reduction of competition and placing new barriers to enter the medical device marketplace. By working with you, we hope to give new and better technology. The companies that create these innovative products get a chance to win in today’s highly competitive market.
For years, the “center” of the healthcare universe was the acute care hospital. That is now rapidly changing, and many hospitals are becoming just another cost center in a much larger healthcare universe. If you are like many supply chain executives, you may be witnessing the lengthening of the healthcare supply chain. In some cases, this means right to the patient’s door.
Chances are, your health system is trying to align your patients’ needs with the services you deliver. As this increasingly occurs, have you defined your supply chain’s strategy for dealing with this fact? New, often consumer-focused healthcare technology is coming on the market at a rapid rate, but often your patients don’t know where to find it. How will you assist them, and make the process as seamless as possible? Here are a couple of questions to consider as you begin laying out your 2019 strategy.
Key Takeaway: Technologically-enabled devices are changing patients’ lives, from reducing pain to receiving insulin from “smart-pumps” on a regular basis. No more shots. All this technology, which is coming faster than ever, requires careful evaluation and vetting — and it must work in concert with your caregivers. This movement to greater consumer involvement in their care compels major healthcare supply chain departments to up their game and be a part of all these solutions. ASPI can help facilitate that for you.
Your purchasing department is likely flooded with requests for new technology, equipment and products every month. ASPI takes the first step in reviewing and vetting new, emerging companies, and only brings those to you that we believe are a good match and can meet your business requirements. While every mid-size company may dream of getting an order from your organization, in some cases it may be too early in their stage of maturity to try to take on your business.
ASPI does an initial rigorous assessment, followed by a deep dive into how small and midsize companies are operating — from their use of EDI and other electronic ordering tools to ensuring the representative calling on you is well-trained, experienced, and capable of working effectively and efficiently with you and for you.