EXACT Question: In the next 12-24 months, do you believe that suppliers' Corporate Account departments will be MORE or LESS important to the company's overall sales success than it is today?
StratCenter's Perspective
The constant barrage of bad economic news may be a boon to Corporate Accounts, says most executives in the industry. According to this Quick Poll that asked about how important Corporate Accounts would be for a company's overall success, nearly one third said it would be slightly more important, yet one half believed it would be MUCH MORE important. Based on the numerous conversations I've had with health system executives, that outlook for suppliers also translates equally for providers as well. More and more IDNs are anticipating a reliance on purchasing for cost-savings leadership during these belt-tightening times. Need proof? I can think of two prime examples: 1) Lynn Britton, a founder of ROi, the supply chain operating division of the Sisters of Mercy Health System just promoted Lynn to CEO of the entire 19 hospital system; and 2) with more and more systems laying off or in a hiring freeze, everyone is going to be asked to do more with less and to figure out how to reduce other, non-labor costs. That sounds like supply chain management to me.
Industry Comments
VP, National Accounts (supplier) - "D" - Given the wild swings in raw materials costs National/Corporate accounts teams will be dealing with more price changes/modifications over the next few years and I believe you will see pricing tied to indexes, PPI for example or the Resin Index for the protection of both the supplier as well as the provider.
Chief Resource Officer (IDN Hospital) - "E" - I believe there will be more centralized contracting by IDN's, particularly in the high cost consumables.
Corporate Contracting, Large Health System - "E" - Corporate Accounts that understand the IDN model are far more successful than those that practice the old ways of divide and concur. IDNs work to move away from those that do not understand the one for one model.
Manager, National Accounts-Healthcare (supplier) - "D" - In our company there are three divisions and Healthcare is consistantly (and exceeding the other two divisions as well) growing despite the sagging economy. It is a credit to our high quality products and tenacity that we are able to succeed during these times.
VP, GPO - "E" - As more and more hospitals enter negative margin territory they are increasing their level of rigor around cost and expense management. Decreasing hospital staff levels have already resulted in expanded relations and dependence on GPO services and resources. Feeling some of the same economic pressures, suppliers are going to have to leverage the scale and relationships of their national and corporate accounts teams to effectively address the demands of the market.
Senior VP, Manufacturer - "B" - In this time of financial crisis and reduced access to funds, the GPOs do not provide as much value to their members nor to their suppliers as they had in the past. The 3% admin on most contracts (and higher payments on specific programs) could and should at this time be passed to the individual accounts or IDN. We have talked and talked and talked about the cost of HealthCare and how we can address this issue and change the system before the government steps in. This is one place to start!
VP of Business Development (supplier) - "E" - Suppliers must develop a broad approach to impacting cost and quality within the supply chain! This includes the ability to understand large providers, how they manage their value analysis process and drive consensus within their organizations. While local account managers are extremely effective with developing relations and sales w/ clinical staff, they do not have the knowledge to often see issues that a large multi-state IDN may be facing.
VP Group Purchasing - "E" - With the downturn in the economy and it becoming a buyers market the Corporate Accounts Resources are going to be crucial for the success of some companies
NCI would like to thank StratCenter for use of this survey. Please see more surveys and articles at: www.stratcenter.com