NOTABLE INDUSTRY TRENDS TO WATCH
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- Melvyn Harrison
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1 IDN SUMMIT
2 NOTABLE INDUSTRY TRENDS TO WATCH Avalere published their 2016 trends we look GREAT! Political focus on the cost of and access to specialty drugs and biologics will continue Patient engagement becoming priority due to value based business model The pace of experimentation with Alternative Payment Models (APMs) is poised to accelerate due to MACRA of 2015 Out of pocket costs are increases due to rising drug costs and value based purchasing Medicare FFS is increasingly being tied to quality and value pace will accelerate Most acute and post-acute care providers are facing lower Medicare payments based upon market baskets Consolidation will continue as providers integrate horizontally and vertically post acute Get ready for risk based capitation of some form or another NOTE: Supply Chain was not mentioned in the data analysis and report
3 TOP 5 HEALTH REFORM CONCERNS Notice what is still NOT mentioned! But can supply chain impact each area of concern? Reduce operating costs 78 percent Shift to value-based purchasing 66 percent Alignment of provider and payer incentives 65 percent Align with physicians more closely 54 percent Develop information systems integrated with primary care physicians 48 percent Source: The American College of Healthcare Executives 2015 survey
4 COSTS ARE SKYROCKETING Pharmacy Leads the Way The emerging issue in healthcare is drug costs. Drug spending represents just 10% of overall health spending. But the number of transactions people have with the health system is much larger for drugs than for physician visits or hospital stays or other services - and the cost is very immediate and tangible. WSJ 9/9/2015
5 COSTS ARE SKYROCKETING Diabetes is a common example
6 AMONG A FIELD OF FEW, AMERINET GOT RESULTS Amerinet was known for its ethics, people, breadth Spend Under Contract 9.2 Billion in products and services flow through our contract portfolio Market Share Large Enough to drive value, Small enough to listen **This will be retained! Membership Acute Care Hospitals 3,515 Clinics 33,197 Long Term Care Facilities 10,361 Physicians (hospital based) Ambulatory Surgery Centers 235 3,354 Emergency Services 1,207 Other 33,532 Total 85,401
7 ALONG COMES INTERMOUNTAIN HEALTHCARE Central Question: Could they do something different, like they have done for decades?
8 HIGHLY INTEGRATED HEALTH SYSTEM Our Charge: Become a model to the industry Hospitals Since hospitals 2,784 licensed beds SelectHealth Since 1983 Health plans 730,000+ members Medical Group Since ,200 employed physicians 558 advanced practice clinicians 30 Instacare Clinics Clinical Programs Since key service lines
9 WHY DID INTERMOUNTAIN BUY AMERINET? To make a difference To be a model to the industry Share Intermountain s best practices both supply chain and clinical Leverage Amerinet s assets Help Amerinet get back to winning
10 OUR MISSION Elevating the operational health of America s healthcare providers This is our noble purpose and our rallying cry. It is why we exist. We do more than provide products for healthcare organizations. Our mission is to elevate the healthcare operations for each client we serve. Operations in this case encompasses every aspect of healthcare, including patient care. As each single organization improves, healthcare as a whole across our nation will be elevated.
11 OUR VISION Be the essential partner for operational excellence in healthcare Our vision defines what we aspire to be. We see ourselves as more than just a partner. We will be the essential partner for healthcare organizations pursuing operational excellence. This means hospitals, clinics, and health systems will seek us out because they know we are crucial to their improvement and success.
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14 WHAT ARE WE NOW AND IN THE FUTURE? Intalere will be a professional Supply Chain organization that has a GPO as one of it s product offerings
15 A FEW GUIDING PRINCIPLES OUR PHILOSOPHY IS DIFFERENT. WE BELIEVE THAT: Supply Chain is Strategic to healthcare The current GPO industry has lost focus on the supply chain Supply chain is more than a portfolio of contracts, and aggregation is only a part of the solution There is a need for a total supply chain solution that enables you to optimize the management of your entire spend OUR SCOPE OF OFFERING IS DIFFERENT: The entire continuum of healthcare delivery All spend categories All supply chain functions from source to settle OUR APPROACH IS DIFFERENT: Our provider centric approach can meet you at your current level of maturity and enhance your capability Combining Intalere s GPO, consulting, and technology with Intermountain s clinically driven supply chain is unique
16 WORKING TO ELEVATE THE SUPPLY CHAIN We are the only industry that keeps it locked away downstairs 40 50% of an organization s spend is supply chain related Freight Costs Easy Hard What do I pay? What do my processes cost? How do work process affect vendor costs? Procure to Pay Logistics/Distribution Expired/Damaged Product Payment Terms Inventory Carrying Costs Physician Preference Costs Standardization Costs
17 WHAT ARE WE DOING ABOUT THESE TRENDS Responding with products and services to fix the pain - INNOVATION Total Clinically Driven Supply Chain Management Solutions Strategy Implementation Operations THE LEAVE-BEHIND People Process Consulting Operations (Outsourcing + Professional Services) Outsourced employees Approach highly dependent on technology and people Technology Technology Solutions Technology enables all services
18 WE WILL FIX PROBLEMS THROUGH INNOVATION Fix the core while building new products and services We recognize the market demands Intermountain Health s innovation. While we will be strengthening the core and building a best in class consulting organization, Intermountain Health will invest heavily into commercializing their unique approach to drive down cost and increase quality. Rural & Telehealth Expanded Rx Offering iccp Core GPO will be Committed ProComp Supply Chain Consulting Precision Genomics
19 TECHNOLOGY TRENDS Automotive R&D Investment Outpaces Aerospace 2014 Innovation Report AutoAlliance.org, Booz & Co
20 OUR TECHNOLOGY FOOTPRINT FUTURE STATE The future state gets us a full analytic for clinically driven supply chain The GPO Spend section has been the 29 yr focus of all capital investment ROYS is the Rest of Your Spend how do we infuse those metrics into day to day operations of the supply chain? Utilization Management is the next phase of sophistication UM lies at the heart of a clinically driven supply chain. How do we compare? We are not getting distracted with the next shiny object!!
21 CONSULTING EXPERTISE IS ROBUST Our focus is the entirety of the supply chain, not just supply cost
22 CONSULTATIVE SERVICES DRIVE CHANGE We are with you throughout execution to solve problems We will assess status quo We will teach a better way We will consult with you unlike other episodic strategy consulting firms Outsourcing is becoming COMMON We will even have our people onsite to drive value Intermountain knows a clinical supply chain
23 WHY DOES ALL THIS MATTER TO YOU With all the changes in the GPO space, that s the central question Look at all the changes in the GPO space! The big ones are placing bets on lower cost of contract to squeeze price and increase shareback to buy business We will focus on price as a management function, but will prepare our customers for capitation by focusing on the whole supply chain financial models will change We will continue to focus on non-acute. Key area that extends the continuum. Do you want to be part of our strategy, not just as a GPO partner? Everyone has a committed program. How is ours different? 80/80, rules for suppliers and members in or out, we track compliance electronically not the supplier Does our different approach with provider led backing resonate with you? We are going to fix healthcare one system at a time and we need YOU!
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