It was a turbulent year in health care. Catastrophes, major business decisions, unexpected events and a host of other developments not only grabbed headlines in 2005, but also, will play a major role in shaping the future of the industry.
The single event that tops the list is Hurricane Katrina, which wreaked havoc on Gulf Cost cities, and in particular on New Orleans. It wasn’t just the damage the storm brought—and that alone was enough to shock the nation—but the shortcomings in disaster planning the hurricane revealed in its aftermath.
Although the tragedy of 9/11 made preparing for the unexpected a top priority in health care, with one powerful swoop across Louisiana, Mississippi and Alabama, Katrina showed us that further planning is necessary. Even though hospitals are expected to be self-sufficient for at least 72 hours in the event of a major disaster, it became obvious that guideline isn’t always realistic.
Distributors did a good job of getting supplies to most facilities affected by the storm, as well as the temporary field hospitals that sprung up in the region.
However, several hospitals in the floodwaters of New Orleans needed help from the federal government, which was extremely late.
As a result, disaster planning is back on the drawing board, and communication and coordination are two chief areas being examined. The action takes place as the industry is in the beginning stages of preparing for the possibility of an outbreak of avian flu.
Criticized for the poor response in New Orleans, the Bush administration has tried to get a jump on developing a plan to respond to a potential pandemic. In November, the president announced his strategy to battle the threat, and early response from hospital organizations and infection control professionals has been mostly positive.
Hospitals, and particularly IC departments, will shoulder a large share of responsibility for ensuring the communities they serve are prepared to deal with an outbreak. HHS has laid out specific responsibilities hospitals need to address, including maintaining adequate supplies and inventory necessary to battle a pandemic.
However, the availability of drugs to fight avian flu may not be something hospitals can control. Numerous nations are trying to obtain doses of Tamiflu, the drug believed to be the best form of treatment. Part of hospitals’ burden will be planning to care for patients without the most effective medication.
Another issue that made an impact on hospitals in 2005—and is sure to be a continual concern in 2006—is the sheer cost of technology. In the last few years, medical device companies have released an impressive array of products, including drug-eluting stents, implantable defibrillators and total joint replacements.
These devices and others greatly improve the quality of patient care; however, with every legitimate reaction of awe to the technology, comes a materials manager’s and CFO’s headache of finding ways to pay for the products without losing money.
A larger number of hospital executives finally began to realize the importance of a well run supply chain, and some materials managers have reported a more supportive relationship with the top brass.
That sentiment needs to spread, and executives need to understand that to manage a well run supply chain, materials personnel need cooperation from the clinical side; and that can only come from hospital initiatives rather than materials’ initiatives.
Finding ways to afford to improve technology also has affected the group purchasing industry, which has been going through a transition. The groups are offering services that provide much more than good pricing.
MedAssets, Alpharetta, Ga., is a prime example of a company that’s earning a reputation for being much more than a traditional GPO.
The operation has invested a good deal of money in technology that can help hospitals in a number of ways, including assessing revenue versus the actual cost of treating patients. Although that may seem like a vital piece of knowledge any business should have, it’s surprising how many hospitals lack that capability.
In 2006, GPOs should continue to evolve into “procurement service companies,” which is the way Broadlane, San Francisco, likes to identify itself.
Competition among the groups will center more on services offered because that’s the criteria hospitals increasingly are using to choose their purchasing partners.
Robert Neil is a health care business writer and analyst whose syndicated column appears monthly in Materials Management in Health Care. To contact him, visit his Web site at www.RobertNeilOnline.com.
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