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GHX Europe Sees Greater Supply Chain Pressures for 2013 Healthcare Market

BRUSSELS, Belgium, December 19, 2012 /PRNewswire/ --

Company predicts healthcare market innovation will continue gaining momentum as financial pressure, austerity measures and global legislation press the industry

The healthcare market remains a precarious place to do business, said GHX CEO Bruce Johnson. However, he predicts the economic and political pressures pushing in on the industry are also accelerating the change required for a sustainable healthcare system.

"The choice is dig in or adapt and thrive," said Johnson. "Continuing to do business using old methods isn't likely to be a winning scenario for any organisation in healthcare. With the pressure the industry is facing, GHX along with the rest of the industry has to answer by offering solutions promising pragmatic change to the way business is done."

"There is great opportunity to change the way business is being conducted," noted GHX Europe president Tina Vatanka Murphy. "What providers are telling us is that in the current climate, they need a way to cut costs while improving patient care. This will undoubtedly focus attention on efficiency savings away from front line care. With the supply chain being the second largest cost centre after labour, it is an obvious place to look for those savings."

GHX Europe predictions for the 2013 healthcare industry:

  • Accelerated  focus on the supply chain
  • Requirement for transparency through system integration and interoperability
  • Increased dependence on supply chain visibility and reporting
  • Greater global commonality

Supply Chain Focus

First among the 2013 predictions from GHX is the anticipation of continued financial pressure on the healthcare industry. "The primary focus for EU nations continues to be reducing their deficits and coping with the financial strains this puts on all member states. In country markets where healthcare is predominantly publicly-funded, such as the UK and Spain, providers are focused at reducing costs away from front line care. In private-sector dominated markets, such as Germany and Switzerland, it is likely that the recent trend of consolidation will continue. For example, the Swiss hospital group Hirslanden Group now consists of 14 clinics" said Murphy. "GHX predicts this can help increase the importance of the supply chain and the focus on reducing operational supply chain cost and inefficiency."

Transparency through System Integration and Communication

"A greater focus on the supply chain will involve a deeper look at integration between different systems to ensure a greater degree of visibility," said Murphy. "Healthcare organisations have evolved separately, chosen different technology service providers and will continue to do so. This creates an imperative for integration between disparate technologies. A trading exchange must be able to integrate and communicate with data management and inventory management solutions. The resulting increase in visibility will help enable organizations to report using a consistent set of metrics."

GHX predicts this will increase the number of organisations looking for integration expertise to enable end-to-end solutions and to deliver interoperability between systems from different service providers.

Supply Chain Visibility and Reporting

"The requirement for interoperability between systems will extend beyond individual providers or suppliers to enable benchmarking at a national and ultimately international level. As provider organizations stride toward new business requirements, they can consider the supply chain as a backbone - a key component of technology infrastructure - that can help capture and share the data they need," said Murphy.

"Before the supply chain can be elevated from the level of an operational burden to the level of a strategic asset, two prerequisites must be met. The first is accurate data, and the second is visibility. Currently, there are large parts of the supply chain that are invisible to many hospitals. For example, frequently hospitals have no accurate idea of what stock they hold on site. One large UK NHS trust 'found' £1.7 million (€2.125 million) worth of additional stock with the aid of capable technology and improved processes."

Greater Global Commonality

"Healthcare is a global market," said Murphy, "and that will be even more evident in 2013. Every time I travel I'm reminded of the increase in the need for global standardization and more commonality across borders."  Murphy sees the July 10, 2012 Federal Drug Administration's long-awaited proposed Unique Device Identification (UDI) rule requiring manufacturers to uniquely identify medical devices through distribution and use, and the recent proposals from the EU Commission as examples of these global market issues.

While the FDA rule itself only applies to manufacturers doing business in the U.S., a universal UDI requirement would help healthcare organizations worldwide better understand the role products play in delivering greater value and higher quality outcomes. UDIs can make it easier to electronically (and in turn more accurately and easily) capture data on specific products used at the point of care, which can help providers determine total costs per procedure, increase billing accuracy, improve inventory management, and with product tracking and identification in the event of product recalls.

"In September this year, the EU Commission has followed suit by publishing proposals for UDI for medical devices. The proposals are due to come into force from 2014 and will increase the pressure on manufacturers to adopt one global standard, and will also increase pressure on providers to adopt supplier-neutral inventory and consignment management solutions," said Murphy.

About GHX

Global Healthcare Exchange, LLC (GHX), a healthcare technology and services company, helps reduce the cost of doing business in healthcare by enabling better supply chain management. GHX makes it easier for hospitals, other healthcare providers and the suppliers that do business with them to drive cost and inefficiency out of their processes. Working with GHX, the healthcare organizations that make up the GHX Global Network are on track to save $5 billion by 2014-savings that can be invested in such things as hiring more nurses, providing care to uninsured children or developing new medical products. GHX is owned by organizations on both the buy and sell side of the healthcare supply chain, including some of the largest companies in the world. Find GHX on the Web, on Twitter @GHX_LLC and on Facebook @GHX and get a global perspective on healthcare industry news, issues and trends at the company's blog, the GHX Healthcare Hub.

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