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Global Healthcare Exchange LLC GHX

Health Care

Getting Health Care Reform Done with the Entire Supply Chain

Healthcare Supply Chain Summit wrestled with industry need for greater data visibility and collaboration

Published: Thursday, April 21, 2011 - 10:28

As part of the keynote of the recent GHX Healthcare Supply Chain Summit, Global Healthcare Exchange (GHX) CEO Bruce Johnson, along with former Republican Senator Bill Frist and former Democratic Senator Tom Daschle, addressed an audience of more than 600 health care business leaders about the challenges and opportunities in designing and delivering a sustainable health care system.

The three-day event focused on the future of the health care supply chain and drew participants from hospitals and medical-surgical suppliers across North America and Europe. The summit addressed a range of critical issues facing the industry, most notably the need for greater data visibility as well as collaboration among suppliers and providers to meet the demands pressing on the health care system.

“The global challenge in health care is going after the cost/quality equation,” said Johnson in his keynote address. “We need end-to-end data visibility within the supply chain in order to create value. If we create this visibility in a purposeful way that allows for informed decision making, it allows us to take costs out of the system. When we combine visibility and illumination and innovative people together, we can create intelligent health care.

“The industry is facing demands for real-time, precise knowledge about business transactions, patients, product lines, markets, and customers. The industry needs a 360° supply chain that connects everything, from data captured at the point of use all the way back to the point of manufacture, and everything in between.” Johnson closed with his commitment to the industry, pledging that GHX will be a change agent for health care through its 360° supply chain, committing to taking cost, waste, and inefficiencies out of the system, and committing to helping make health care one of the most efficient industries.

Frist agreed that the value equation is of primary importance in getting to the health care reform end game. In talking about the framework and background of the health care bill, he was quick to clarify that it’s not actually a reform bill but rather an access bill.

In presenting how he believes the industry will evolve and adapt, Frist referenced the cost/value equation. “It’s outcomes, it’s results, it’s quality, it’s performance,” said Frist. “It’s all those things which historically in health care we have not measured. But in business and in the manufacturing sector specifically, we’ve been measuring all the time.

“We are currently in a fee-for-service system which pushes quantity but are moving to one that’s focused on the value equation. We are doing this by moving from an open-access, fee-for-service, and shared-rates system to care systems that over the next three to four years will inject cost and quality measures. A system that is evolving into a field of shared savings—where, if you save a dollar you can share in that savings—to a full-blown ACO model. Where the money goes, there the behavior goes,” added Frist.

“From a public policy perspective, we are experiencing a change in fundamental approaches relating to society that equal if not exceed the impact of the change to our monetary system in 1913, with the passage of social security in 1935, and the passage of Medicare in 1965,” said Daschle as he took the podium. “It is profound change. The country remains divided on what we want the health care market to look like. And our challenge is to reconcile those disagreements. Most important is the disagreement on the role of government. But we are in agreement on many things, like cost. If nothing changes, health care will be 32 percent of GDP, and that is unsustainable. There is no disagreement that there is a cost problem, an access problem, and a quality problem.

“We understand what’s causing these problems. Transparency in the health sector is far behind other industries in our economy. Today, we have more information about sports figures than about every provider. You can’t fix what you can’t see, and the health care marketplace is very opaque,” added Daschle.


About The Author

Global Healthcare Exchange LLC GHX’s picture

Global Healthcare Exchange LLC GHX

Global Healthcare Exchange LLC (GHX) provides software and services concerning supply chain, accounts payable, and sales force automation; content and contract management; business intelligence; and standards and data synchronization. GHX connects suppliers, distributors, providers, and group purchasing organizations in North America and Europe through an open and neutral electronic trading exchange. It enables health care organizations to reduce costs, become more efficient, make better business decisions, and deliver better patient care.