Guest speakers for the 2019 Supply Chain Summit came from across the country to provide National Account Executives with the knowledge for “getting ahead” in a market that’s constantly changing. A major area in question was how to navigate GPOs and IDNs, and understanding acquisitions and consolidations.
Ken Murawski, President and Founder of Healthcare Links, is a leader in sales and marketing resources focused on Corporate Accounts and matching companies with cost effective products and services to major alliances, IDNs and GPOs. For 16 years, Murawski oversaw Kendall Healthcare’s handling of a variety of products through the acute and alternate care markets,
We’ve known Dee Donatelli for many years. She is a no nonsense professional with a passion for whatever she puts her mind to. With a broad background as a clinician and Supply Chain professional, she has put together a program for suppliers that is extremely timely.
The Value Analysis Apex is a hands on interactive approach to engaging Value Analysis-the people and the process. It is the culmination of Dee’s background that can help any supplier improve their approach and results with IDNs. Dee was kind enough to conduct a webinar to our clients showing a snapshot of why Value Analysis is important.
In a previous article, I discussed the GPO/IDN Strategy as it relates to your company capabilities. An equally important part of the strategy is about your product. Just as all GPOs and IDNs are different (“ if you’ve seen one IDN, you’ve seen one IDN”), your strategy has to take into account the product or service you are selling and which GPOs and/or IDNs make the most sense to approach.
The evolution of GPOs and IDNs
Years ago, hospitals joined GPOs in order to help them negotiate the best prices based on large membership associations. As IDNs evolved,
1. 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.
2. 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.
GPOs have been around for over 30 years but have continued to consolidate down to four nationals: HealthTrust Purchasing Group, Intalere, (fka Amerinet), Premier and Vizient (the combination of Novation and MedAssets).
More recently, IDNs have joined the conversation. Before we dive into the strategy, let’s make sure we have the definitions straight.
Ten years ago, the acronym “IDN” was just being created: we heard IHN, (integrated health network) IDS (Integrated delivery system) and MHS (Multi-hospital system). Although we have settled on IDN, (integrated delivery network) it’s technically not applicable to organizations that act as a GPO and span many states,
We have attended the IDN summit twice per year for over 20 years. Here are a few thoughts to help you be more successful.
1. Do the homework
With over 80 provider systems attending the reverse expo at the IDN Summit, it is impossible to see the majority even if you have more than one person. So the strategy is all about focus. Review the attendee list. If you have a sales organization, send it to them and find out what they may have working at any of these Systems or individual hospitals within the systems. If you have current business within the system,
Top 10 mistakes in dealing with GPOs, IDNs, and RPCs
- Not understanding the differences between GPOs (Group Purchasing Organizations), IDNs (Integrated Delivery Networks), and RPCs (Regional Purchasing Collaboratives) and their business models
- Treating each GPO, IDN, and RPC the same (“when you’ve seen one, you’ve seen one”)
- Viewing the GPO as the customer/end user (GPOs don’t buy anything; but they are a key component in influencing behavior at some customer levels)
- Not setting specific goals/expectations during an awarded contract cycle and communicating regularly (it’s critical to manage the relationship at both a high level and the field level with their members)
- Assuming they have the time and resources to sell your product (the phone will not start ringing once a contract is announced;