Market Insights: Imperatives for providers

Given the new market realities, provider-based regional coalitions will need to heed five imperatives, said Geoffrey Brenner, president, Texas Purchasing Coalition.

 

• Growth. “For TPC, growth used to be a luxury,” he said. “Now it’s essential.  Pressures to achieve greater scale and efficiencies will only grow, and given the scalability of the TPC model, we can and must multiply our purchasing volume.

 

• Stronger relationships with physicians. “Physicians are critical players and the most influential drivers of medical care and procedures,” said Brenner. “It will be impossible to find lasting solutions without significant physician engagement and leadership. Hospital leaders are increasingly finding new ways to develop stronger relationships with physicians and invite them into key positions of leadership and responsibility.”

 

• Tackle the tough product categories. Many RPCs have tackled the less challenging product categories. “The TPC is now deeply immersed in physician- and clinician-driven categories on an aggregated scale basis,” said Brenner. “It sounds straightforward, but the reality is, it’s very challenging work, which requires significant data that is credible to physicians and clinicians. In an RPC model, the complexity is multiplied because this work must occur among multiple independent organizations, and their physicians, at once. TPC members know how difficult and ultimately fruitful this difficult work can be.”

 

• Purchased services. Physicians aren’t the only ones who have deep preferences for a particular product or service. “Executives who make business decisions for purchased services have many of the same preferential inclinations,” said Brenner. “TPC members have been strategically aggregating purchased services for many years, but for many RPCs, independent hospitals and IDNs, it remains unchartered territory. For many organizations, purchased services simply hasn’t been an area of significant focus, but we’re finding that many of these contracting decisions are undermanaged and not optimized.” GPOs are investing in purchased services analytics and are beginning to apply greater rigor to their purchased services portfolios, but there is a lot of work to be done and significant economic opportunities within this large spend category, he added.

 

• Think differently. TPC members took a gamble when they ended their relationship with their prior GPO and moved forward with MedAssets. “That decision has paid significant returns,” said Brenner. “But those results are yesterday’s news, and we must challenge ourselves to think differently to continue to produce superior yields. We must be willing to ask difficult questions, and continually keep asking new ones.”