Edition: April 2002 - Vol 10 Number 04
Author: Robert Neil
A take no prisoners'' attitude is common in many industriesespecially among sales forces. Battles between supermarket chains, fast-food establishments and soft-drink companies have left deep scars. Sometimes the real victim is the customer, who often gets neglected in such fights.
It's true that the healthcare supply chain has some fierce competitors. From top executives to sales reps on the street, rivalries are well-entrenched, and battles over territories and market shares occur constantly. However, despite the skirmishes, rivals often harbor an underlying tone of respect for each other. In this way, healthcare is different from some other industries.
Is it because healthcare companies realize they can never afford to lose sight of customers, hospitals and physicians, who need unbroken quality support to deliver care to the nation's sick and wounded? After all, a company that neglects its customers, even for a moment, risks losing business that may never return. As a result, unwritten rules of civility are followed by most healthcare companies. (In all fairness, it is true that some fail to take notice of prudent business practices. But they usually end up paying for it down the road.)
Healthcare's unique culture of respectful rivalries'' has been hard at work recently. National GPO AmeriNet has agreed to join a number of its rivals including San Diego-based Premier Inc., Irving, TX-based Novation and Rolling Meadows, IL-based Consorta Catholic Resource Partners on the Coalition for Healthcare eStandards (CheS).
Based in Ann Arbor, MI, the Coalition (www.chestandards.org) is comprised of GPOs and e-commerce companies which have joined forces to adopt and promote uniform industry data standards for supply chain transactions over the Internet. It also aims to reinforce and promote already-existing standards, such as the Universal Product Number and Health Industry Number.
Bud Bowen, president of St. Louis-based AmeriNet, says he was reluctant to join the Coalition at first, because the organization's long-term goals were unclear to him. But he never said never,'' and he certainly didn't make any public comments that would have made it difficult for AmeriNet to join the coalition later.
Why the change of heart now? Bowen believes that as CHeS has grown, its membership has become more diverse, and its plans for the future clearer. He's also convinced that CHeS' initiatives will not conflict with existing proposals also targeting standards in the supply chain.
The move strengthens an organization made of up rivals who are all working for a cause that could benefit the entire industry. It doesn't mean that these GPOs will be any less fierce when battling for members. But one can only hope that those working in healthcare have a sense that their company's success alone is not the ultimate goal.
A company or individual that crosses the line between hard-fought battles for business and petty, personal grudges could be in for hard times when reasonable working relationships arise. Conversely, those that maintain the attitude of respectful rivalry'' will enjoy certain benefits. For example, in January, GPOs Joint Purchasing Corp., New York, and MedAssets HSCA, Inc., St. Louis, announced a marketing alliance that gives their members access to both companies' contract portfolios. These two organizations have never had a noticeable squabble, and therefore the sincerity of their desire to work together wasn't questioned.
Suppliers Take Note
Suppliers have plenty to learn from these stories, namely, that they should be especially careful about what they say to customers. Denigrating a competitor may help make a sale today, but if your company later decides to work with that competitor in any capacity, customers may question the ethics of both. The advice seems as relevant as ever in light of trends showing these types of partnerships growing in popularity.
Perhaps the most improbable working relationship of all is the Global Healthcare Exchange (GHX), Westminster, CO. The e-business operation was founded by the world's leading medical supply manufacturers, who have spent years trying to outdo each other in almost every aspect of the business. In fact, some rivalries were so intense and so long-standing, many observers wondered if the exchange could stay together. But after a period of stumbling to establish itself, GHX has quieted critics and has emerged as a top player in the e-commerce arena.
During its climb to the top, GHX executives and supporters were at times clearly annoyed with competing Internet operations, such as Neoforma Inc., San Jose, CA, and Medibuy Inc., Nashville, TN. Later, negative comments made by some GHX members and supporters were quickly swept under the carpet when the manufacturers' exchange announced an alliance with Neoforma.
Although remarks may never have gotten as ugly as those in other industries, GHX may have wished it had kept a tighter rein on people representing it. One of the first questions hospitals asked after the Neoforma partnership was made public was, Aren't your two companies incompatible?'' Both firms' credibility was hit a little, and valuable time was wasted explaining how any dispute between them was just a misperception.
Since then, GHX may have learned a lesson. In December, it agreed to join CHeS, in a move that involved a bit of behind-the-scenes posturing and negotiating. Despite the egos and pride involved, both sides did a good job maintaining a civil public image.
There are certainly lessons to learn from other companies' actions, and since partnerships are likely to continue, grandma's advice of think before you speak'' is as good a motto as any. It's true that politely correct language can sometimes seem awkward, but there's a reason for the approach. Not only are alliances a possibility, personnel shifts are a common occurrence in the industry, and you never know who your next employer might be.
ABOUT THE AUTHOR
Robert Neil is an Orange County based health care analyst and business writer who specializes in supply chain and managed care issues. He may be reached through his Web site: www.robertneilonline.com