Publisher’s Letter: The Improved Outcomes Story

Edition: July 2012 - Vol 20 Number 07
Article#: 4014
Author: Brian Taylor

In reading through this issue it was clear to me that the changes we have talked about happening for the past two years are now indeed taking place and are shaping the way we do business.

Our cover story on outcomes-based selling is pretty straightforward. It details the need for a shift toward positioning our products and services in the context of cost, quality, and patient experience. From an industry that had been so feature- and benefit-focused around the product, it has caused a lot of “back to the drawing board” comments in many a marketing department. Providers today are demanding evidence to substantiate claims about improved outcomes and efficiencies. Bullet points on a marketing piece no longer will suffice. Reps better be prepared to provide the support material to back up the claims.

In an interview with Repertoire, Stanton McComb, McKesson’s new president of their Medical/Surgical division, points out the need for manufacturers to work closely with distribution in developing the evidential support they are being asked to demonstrate.

The financial pressures placed on customers in the form of reduced reimbursement is surely the leading driver of healthcare reform. As a result, the sense that it is all about price when negotiating with IDN customers is a daunting obstacle to overcome. It is very real. Suppliers are just now getting their arms around the outcome story and undoubtedly will get better at fairly quickly. Nevertheless, there is a level of frustration that even with a compelling story around cost, quality, and improved patient outcomes/satisfaction, it seems that acquisition cost usually is the tipping point.

Perhaps that dynamic will change when the incentives are aligned more closely among the supply chain stakeholders. On the buy side, it still seems apparent that those in charge of spend at the IDN level are rewarded based on demonstrated line item savings. Obviously that makes it harder to sell the improved outcomes story on a higher cost product. I suspect that we will begin to see changes in that structure as suppliers and providers continue to engage in conversations.

Certainly ACOs are another component of reform that has a lot of people scratching their heads. We all seem to like the concept of a coordinated care process in improving patient outcomes, but remain confused on exactly how these organizations will evolve. Will they be hospital driven, physician driven or perhaps employer driven? The Claflin Company in Rhode Island is experiencing firsthand some of the dilemmas a distributor will have in servicing these developing entities. Who is best equipped to handle all the moving parts of a hybrid organization such as an ACO? Only time will tell. The saying that if you have seen one IDN you have seen one IDN surely applies to ACOs as well.

Toss in the uncertainty that the Supreme Court decision may have on all this only makes for more interesting speculation. Stay tuned and strap yourself in – it should be a wild ride!

Brian Taylor