Once again consolidation will dominate the minds of purchasing and materials managers across the country this year.
For providers, it's time to make hospital mergers pay off and to deliver on the promise of integrated delivery systems. That means materials managers will be hustling harder to make sure more supplies get to more places at lower costs than ever before.
And group purchasing organizations, particularly the virtual national duopoly of Premier and the VHA-University HealthSystem buying consortium, will feel the heat from restive hospital systems questioning how much value they are really getting for their purchasing dollars.
As independent delivery networks grow bigger so does the question of whether to purchase solo.
To date, only a select few have gone that route, such as Partners HealthCare System in Boston or the Mayo Clinic in Rochester, Minn. Look for more to try it this year.
Suppliers will roll out the red carpet for those bold systems willing to venture into independent purchasing. The only thing worse than losing out on a big GPO supply contract seems to be winning one. Manufacturing margins have been squeezed by the low prices needed to snare major group contracts and the administrative fees levied for the selling privilege. To make matters worse, the promised shifts in market share to vendors with preferred contracts have been slow to materialize.
Compliance, or the lack of it, lies at the heart of many manufacturers complaints about group purchasing. For Premier, this year will be put up or shut up time for delivering on its vaunted compliance targets. Finally, the bulk of the group's contracts are in place and most old deals have run their course.
To a lesser extent many other group purchasing organizations also will be challenged to deliver on their versions of compliance, heightening manufacturers' reservations and their interest in going direct to hospital buyers.