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Jaimy Lee
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Purchasing executives find plentiful supply of big issues


By Jaimy Lee
Posted: October 19, 2011 - 12:01 am ET
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Group purchasing executives gathered in Washington last week to discuss supply chain issues ranging from the drug shortages and medical device gag clauses to the effect of bundled payments on supply chain costs and the “greening” of the supply chain.

The annual expo was co-hosted by the Healthcare Industry Supply Chain Institute, an organization that represents suppliers and manufacturers, and the Health Industry Group Purchasing Association, which announced that it has changed its name to the Healthcare Supply Chain Association.

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Healthcare reform and the recession have had a profound effect on hospitals in recent years, Jody Hatcher, president and CEO of Novation, said during the first day of the expo. Few providers want to cut labor costs, which has led to a greater emphasis on reducing costs within the supply chain.

“GPOs play an important role in the cost equation,” Hatcher said, later adding that purchasing organizations are seeking new ways to drive efficiencies.

While concerns about cost drove a great deal of the discussion at the expo, other notable news included the HSCA's endorsement of the standardized environmental questions for medical products, a set of guidelines that can be used to identify, select and procure “environmentally preferable medical products.” Reston, Va.-based Practice Greenhealth created the guidelines.

In addition, Todd Ebert, Amerinet's president and CEO, announced that HSCA has formalized plans for a meeting in November with the Medical Device Manufacturers Association to discuss some of the issues between the two sectors.

Another topic that came up repeatedly was Medtronic's cancellation of hospital purchasing contracts this year, with one executive calling the cancellation an “opportunity” to talk about what GPOs do and another referring to it as Medtronic's “swing-and-miss.”

At the expo's final session, which addressed some of the issues between GPOs and suppliers, Les Popiolek, senior vice president of strategic sourcing and procurement solutions at MedAssets, agreed that while it is more expensive for a supplier to maintain market share without a contract, smaller companies that are touting products with an economical price tag and better outcomes should be awarded the opportunity to compete.

And, despite concern about the regulatory agenda in Washington, including the impact of the Joint Select Committee on Deficit Reduction's recommendations later this year, GPO executives say they are pushing forward with support of hospitals and health systems as they cut supply costs.

“GPOs have never been more relevant,” Lee Perlman, president of GNYHA Ventures, said during the expo.

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