Some manufacturers selling products to hospitals are projecting price decreases in the next six months, while others suggest increases of up to 20 percent, according to a new analysis by the Premier healthcare alliance.
Earlier this week, Premier released its Economic Outlook and Inflation Estimates analysis through August 2009. The report suggests that current economic conditions are making the financial decisions of not-for-profit hospitals more difficult than ever before.
Eugene Schneller, and Natalia Wilson, MD, co-directors of the Health Sector Supply Chain Research Consortium at Arizona State University's School of Health Management and Policy, wrote the report's introduction about "How hospitals can cope with the sick economy."
They noted that "Maximizing the dollar will require close collaboration between the hospital, the medical staff, the group purchasing organization and the supplier. Now more than ever, supply chain executives will be critical in leading initiatives to provide organizational sustainability."
The Health Sector Supply Chain Research Consortium works to develop the best supply chain solutions to advance excellence in healthcare supply chain practice.
The inflation estimates in the Premier analysis are by category, including cardiovascular services, clinical laboratory, facilities, foodservice, housekeeping, imaging, IT/telecommunications, nursing, pharmacy, support services, surgical services, and women and children.
"Today's economic conditions are making not-for-profit hospitals' already difficult financial situation worse," said Mike Alkire, president of Premier Purchasing Partners. "Our analysis will help alert our members to market forces that could drive price changes in the coming months and years."
Alkire said the keys to practical spending in this type of economy include: identification of opportunities; access to credible and current data; a working relationship with the physician community; open communication with suppliers with a goal of making them part of the solution; and optimization of group purchasing organization relationships.
James Oliver, president and CEO of Yankee Alliance Inc., noted in the report that "one of the biggest challenges we face is competing for the limited amount of time our members have to address the opportunities available to save money."
"There are numerous opportunities to reduce costs," Oliver wrote. "The challenge is prioritizing those opportunities and making time for the staff to convert products or work through the value analysis process, along with the many other pressures our members are facing."
The Economic Outlook and Inflation Estimates, formerly called Inflationary Indices, is designed to help Premier members with budgeting. Premier publishes the report twice a year in the first and third quarter.
Premier is a group purchasing organization working with more than 2,100 U.S. hospitals and 54,000-plus other healthcare sites.