Collaborative Solutions to Improve Pricing Accuracy Steve Inacker, President Hospital Sales and...
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Transcript of Collaborative Solutions to Improve Pricing Accuracy Steve Inacker, President Hospital Sales and...
![Page 1: Collaborative Solutions to Improve Pricing Accuracy Steve Inacker, President Hospital Sales and Services, Medical Segment Cardinal Health Bill Abrams,](https://reader038.fdocuments.in/reader038/viewer/2022110404/56649e9d5503460f94b9e607/html5/thumbnails/1.jpg)
Collaborative Solutions to Improve Pricing
Accuracy
Steve Inacker, PresidentHospital Sales and Services, Medical Segment
Cardinal Health
Bill Abrams, PresidentDistributed Products
Medline Industries, Inc.
![Page 2: Collaborative Solutions to Improve Pricing Accuracy Steve Inacker, President Hospital Sales and Services, Medical Segment Cardinal Health Bill Abrams,](https://reader038.fdocuments.in/reader038/viewer/2022110404/56649e9d5503460f94b9e607/html5/thumbnails/2.jpg)
Healthcare Supply Chain 2015Strategic Insights for the Distribution Channel
![Page 3: Collaborative Solutions to Improve Pricing Accuracy Steve Inacker, President Hospital Sales and Services, Medical Segment Cardinal Health Bill Abrams,](https://reader038.fdocuments.in/reader038/viewer/2022110404/56649e9d5503460f94b9e607/html5/thumbnails/3.jpg)
Approach
McKinsey & Company partnership
In-depth interviews with 40 key provider execs across markets
HIDA Thought Leaders Summit
Copyright 2013 Health Industry Distributors Assn.
![Page 4: Collaborative Solutions to Improve Pricing Accuracy Steve Inacker, President Hospital Sales and Services, Medical Segment Cardinal Health Bill Abrams,](https://reader038.fdocuments.in/reader038/viewer/2022110404/56649e9d5503460f94b9e607/html5/thumbnails/4.jpg)
Thought Leaders’ Top Recommendations
1. Fix the contracting process
2. Link products and outcomes
3. Implement and champion data standards
4. Partner in standardization / streamlining efforts
5. Enable the home setting
Copyright 2013 Health Industry Distributors Assn.
![Page 5: Collaborative Solutions to Improve Pricing Accuracy Steve Inacker, President Hospital Sales and Services, Medical Segment Cardinal Health Bill Abrams,](https://reader038.fdocuments.in/reader038/viewer/2022110404/56649e9d5503460f94b9e607/html5/thumbnails/5.jpg)
Copyright 2013 Health Industry Distributors Assn.
Wonder Why Contracting Topped the List?
Pricing problems are a huge source of customer complaints
Time and cost invested in administering complex pricing systems
Complex processes need streamlining
![Page 6: Collaborative Solutions to Improve Pricing Accuracy Steve Inacker, President Hospital Sales and Services, Medical Segment Cardinal Health Bill Abrams,](https://reader038.fdocuments.in/reader038/viewer/2022110404/56649e9d5503460f94b9e607/html5/thumbnails/6.jpg)
Who Owns Contracting?
Source: Cardinal Health
![Page 7: Collaborative Solutions to Improve Pricing Accuracy Steve Inacker, President Hospital Sales and Services, Medical Segment Cardinal Health Bill Abrams,](https://reader038.fdocuments.in/reader038/viewer/2022110404/56649e9d5503460f94b9e607/html5/thumbnails/7.jpg)
Who Owns Provider Communication?
GPO
Web
site
sW
ebsi
tes
Sales RepEm
ail Sales Rep
Sales Rep
![Page 8: Collaborative Solutions to Improve Pricing Accuracy Steve Inacker, President Hospital Sales and Services, Medical Segment Cardinal Health Bill Abrams,](https://reader038.fdocuments.in/reader038/viewer/2022110404/56649e9d5503460f94b9e607/html5/thumbnails/8.jpg)
Last-Minute Negotiations Challenge Pricing Accuracy
Source: 2011 HIDA Survey
15 - 30 Days23% 30 - 45 Days
23%
<15 Days22% At Least 45 Days
19%
Retroactive13%
More than half of contract changes received less than 30 days before effective date
Copyright 2013 Health Industry Distributors Assn.
![Page 9: Collaborative Solutions to Improve Pricing Accuracy Steve Inacker, President Hospital Sales and Services, Medical Segment Cardinal Health Bill Abrams,](https://reader038.fdocuments.in/reader038/viewer/2022110404/56649e9d5503460f94b9e607/html5/thumbnails/9.jpg)
Retroactive Pricing Updates Make Timely Invoicing Difficult
66.7%
20%
6.7% 6.7%1-7 days retroactive
15-30 days retroactive
8-14 days retroactive
>30 days retroactive
Source: 2011 HIDA Survey
Just how late are retroactive change notices?
Copyright 2013 Health Industry Distributors Assn.
![Page 10: Collaborative Solutions to Improve Pricing Accuracy Steve Inacker, President Hospital Sales and Services, Medical Segment Cardinal Health Bill Abrams,](https://reader038.fdocuments.in/reader038/viewer/2022110404/56649e9d5503460f94b9e607/html5/thumbnails/10.jpg)
Most Changes Communicated from Manufacturer to Distributor
Via Excel, Not EDI
5%
9%
86%
Hard copy
EDI 845
Emailed Excel spreadsheet
Source: 2011 HIDA Survey
Method of change notification
Copyright 2013 Health Industry Distributors Assn.
![Page 11: Collaborative Solutions to Improve Pricing Accuracy Steve Inacker, President Hospital Sales and Services, Medical Segment Cardinal Health Bill Abrams,](https://reader038.fdocuments.in/reader038/viewer/2022110404/56649e9d5503460f94b9e607/html5/thumbnails/11.jpg)
Pressure on Provider Margins Drives Greater Focus
Expected revenue decline among providers
70%
Source: McKinsey & Company / HIDA Thought Leaders Interviews, 2012
10-20%
Up to 10%
21-30%
20%
10%
Copyright 2013 Health Industry Distributors Assn.
![Page 12: Collaborative Solutions to Improve Pricing Accuracy Steve Inacker, President Hospital Sales and Services, Medical Segment Cardinal Health Bill Abrams,](https://reader038.fdocuments.in/reader038/viewer/2022110404/56649e9d5503460f94b9e607/html5/thumbnails/12.jpg)
How do we change things?
![Page 13: Collaborative Solutions to Improve Pricing Accuracy Steve Inacker, President Hospital Sales and Services, Medical Segment Cardinal Health Bill Abrams,](https://reader038.fdocuments.in/reader038/viewer/2022110404/56649e9d5503460f94b9e607/html5/thumbnails/13.jpg)
Distributors are usually contractually required to give 30-day price change notice to customers.
All parties need time to load pricing.
Insufficient notice results in price mismatches and costly rework.
Make Sure Distributors Get 45-Day Advance Price Change Notification
Copyright 2013 Health Industry Distributors Assn.
![Page 14: Collaborative Solutions to Improve Pricing Accuracy Steve Inacker, President Hospital Sales and Services, Medical Segment Cardinal Health Bill Abrams,](https://reader038.fdocuments.in/reader038/viewer/2022110404/56649e9d5503460f94b9e607/html5/thumbnails/14.jpg)
Make sure all parties understand when contracts are expiring and get in front of them.
Ask manufacturers to “auto-extend” existing contracts for at least 60 days when new ones start dates are likely to be delayed.
So Begin Negotiations Early!
Copyright 2013 Health Industry Distributors Assn.
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Negotiate “Landed” Pricing
Add-on freight charges to distributors cause price mismatches.
Contract for a “delivered” price to ensure price matching.
Copyright 2013 Health Industry Distributors Assn.
![Page 16: Collaborative Solutions to Improve Pricing Accuracy Steve Inacker, President Hospital Sales and Services, Medical Segment Cardinal Health Bill Abrams,](https://reader038.fdocuments.in/reader038/viewer/2022110404/56649e9d5503460f94b9e607/html5/thumbnails/16.jpg)
Support Industry Standards
Commit to using GS1 standards within your organization.
Push for adoption of GS1 by your manufacturers.
Copyright 2013 Health Industry Distributors Assn.
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Desired Results Require Systemic Transformation
Copyright 2013 Health Industry Distributors Assn.
![Page 18: Collaborative Solutions to Improve Pricing Accuracy Steve Inacker, President Hospital Sales and Services, Medical Segment Cardinal Health Bill Abrams,](https://reader038.fdocuments.in/reader038/viewer/2022110404/56649e9d5503460f94b9e607/html5/thumbnails/18.jpg)
The Old Tools Aren’t Enough
Copyright 2013 Health Industry Distributors Assn.
![Page 19: Collaborative Solutions to Improve Pricing Accuracy Steve Inacker, President Hospital Sales and Services, Medical Segment Cardinal Health Bill Abrams,](https://reader038.fdocuments.in/reader038/viewer/2022110404/56649e9d5503460f94b9e607/html5/thumbnails/19.jpg)
The times we are in are unpredictable, but these are the times when transformative change can actually happen.
– Healthcare CEO
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www.streamlininghealthcare.org
Copyright 2013 Health Industry Distributors Assn.
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Steve Inacker, President
Hospital Sales and Services, Medical SegmentCardinal Health
Bill Abrams, PresidentDistributed Products
Medline Industries, [email protected]