In Today's Healthcare Supply Chain, Commoditization Often Results in a Decline in Both Quality and Innovation, Leading To a State of Mediocrity.

In today's healthcare supply chain, the trend of commoditization frequently leads to a decrease in both quality and innovation, resulting in a pervasive state of mediocrity. As products become increasingly standardized, competition tends to center around replicating existing solutions and competing on price rather than fostering creativity and improvement. This focus on cost-cutting can stifle advancements and limit the development of new, effective solutions that truly enhance patient care. To break free from this cycle, it is essential for stakeholders to prioritize quality, invest in innovative technologies, and seek out unique solutions that address the evolving needs of healthcare providers and patients alike. By doing so, we can elevate the standard of care and drive meaningful progress in the industry., the emphasis on unique features, superior performance, and advancements in technology diminishes. This shift can compromise patient care and outcomes, as providers may settle for generic solutions that do not meet the specific needs of their patients or the complexities of modern healthcare environments.

Modern healthcare's clinical value analysis frequently relies on an intellectual contagion, one that drives two fundamental questions we hear from care professionals all the time. It’s almost always scripted: "How much is it?" when compared to inferior technologies, and "Is it on a GPO contract?" The latter question and its assumption incorrectly suggests that being on a contract somehow ensures products have been rigorously and comparatively evaluated and analyzed for true “value”, encompassing cost-benefit assessments alongside opportunities for improved efficacy, safety, and return on investment, rather than price alone. This assumption could not be any further from the truth.

As a result, countless care professionals across the nation are stripped of opportunities to elevate the quality of care they provide to patients, ultimately compromising the safety of both groups. They face restrictions in selecting superior products and services, often even in cases where state laws mandate such options. Instead of genuine choice, they are presented with an illusion of choice; the barriers and administrative hurdles for introducing a "non-contract" item are intentionally designed to demoralize staff and complicate the process, making it challenging to fulfill their requests. This is despite the illusory statement made by the HCSA, The Healthcare Supply Chain Association (HSCA) is a broad-based trade association that represents 14 purchasing organizations. ?

“Are hospitals and suppliers required to use GPOs??

No. All GPO contracts are voluntary and the product of competitive market negotiations. Suppliers are not required to contract with GPOs and healthcare providers are not required to use the contracts negotiated by GPOs with suppliers, even if the providers were a part of the committee process that reviewed and approved the contracts. All hospitals, nursing homes, clinics, surgery centers, etc., can purchase “off contract” and often do.”

?GPOs and hospital administrators have increasingly hijacked our industry under the guise of “value” and “cost savings”, only to set us back decades behind emerging nations. Professional care organizations have also gotten into the grift of “industry partnerships”, eroding the non biased and objective content and practice guidelines needed to guide their clinical due paying members. This is exactly why we don’t advertise in magazines or pay care organizations via industry partnerships. Apparently if you pay enough, you can be listed in certain clinical practice guidelines as a standard of care. How’s that for objectivity??At the same time, Healthcare Value Analysis Organizations have also been compromised, as most of their leadership are all employees of one GPO or another, leading to further conflicts of interests.

Innovation Vs Cost: There is no "Soft" Cost!

Despite how many might see our U.S. healthcare industry as innovative, In 2022, the United States ranked 11th in the World Index of Healthcare Innovation, down from 6th in 2021 and 4th in 2020. Whenever I travel overseas to global healthcare conferences like Medica or Arab Health, I'm struck by the fact that, despite the United States' substantial healthcare expenditure—approximately $4.8 trillion annually, representing about 17.6% of our GDP, and expected to grow to $7.7 T by 2032—we consistently lag 10 to 20 years behind other countries, including those with fixed healthcare costs. The relentless emphasis on cost and profits at the expense of quality care and patient safety should alarm all Americans, particularly as our premiums rise and coverage diminishes. The cost of care is not decreasing; in fact, it resembles a hockey stick on a graph, soaring toward unsustainable levels. Corporations and intermediaries have taken control of our industry, stripping us of choice and transforming millions of skilled care professionals into mere employees. Their primary goal appears to be rationing the resources caregivers require, all to maximize profits for administrators, shareholders, and private equity firms. The irony is striking: while other nations with fixed healthcare costs are actively pursuing innovation to enhance outcomes and reduce expenses, we seem to be moving in the opposite direction. These countries recognize that investing in new technologies and methodologies is essential for improving patient care and maintaining efficiency within their healthcare systems.

In contrast, the focus on cost-cutting measures and commoditization in our healthcare landscape often stifles creativity and discourages the development of innovative solutions. This approach not only hampers progress but also risks compromising the quality of care that patients receive.

In the U.S. healthcare landscape, we frequently hear terms like "evidence-based care," but these phrases may lose their luster when we acknowledge that the evidence itself is always changing. Innovation, research, and the science of care are perpetually advancing daily, as is our ability to adapt. There are constant enhancements in pharmaceuticals, devices, services, and technologies aimed at improving patient care. All of these innovations need to be assessed promptly, rather than waiting for a commodity GPO category to come up for bidding. In fact, just this delay can hinder innovation by an average of 3 to 5 years for any category. While there are no real innovations to be had for commodities like bedpans and Bandaids, there are many products that impact care processes and safety that are never given a timely access to the market. This is why commoditization is bad for the industry. It seeks to assign all products in a category as equal, and they are surely not.? This is the same for terms like "value" and "value based", as it fails to comprehend the subjective value of each party in an organization. One may focus on cost, while another as a means of better care delivery. These values are not always aligned and lose overall objectivity.

Is it really Evidence Based?

?In my two decades of experience as a nurse anesthetist, I've witnessed how the term "evidence-based" anything has contributed to a culture of "the way we've always done it." When clinicians believe their practices are set in stone due to established evidence or dogma, it erects a cultural barrier to advancement and progress. When caregivers are denied access to innovation, in either pharma or medical devices, even processes of care, it hinders patient care’s evolution. It gives rise to “inherent morality”, “normalization of deviance”, and “groupthink” cultures.?

Consequently, when I give lectures, I discuss these cultural impacts on quality and safety. You can only evolve care through the tools in your tool chest, along with the education and cultural improvements that follow. Instead of lecturing the same old trope of “evidence based” this or that, I teach a new term, “Best practices based on current research and evidence”, because I understand how clinical practice and dogma changes over time. I’m also keenly aware that it takes 15-20 years on average to evolve cultural practices, and adoption.?

The Innovation Divide

Innovation often flourishes in small companies rather than large corporations. Smaller firms tend to be more agile and willing to take risks, allowing them to respond quickly to market needs and customer feedback. This nimbleness enables them to develop and launch new products that address specific challenges faced by healthcare providers and patients.

In contrast, larger corporations often become risk-averse as they grow. Their size can lead to bureaucratic processes that slow down decision-making and product development. Additionally, as they expand, they may lose the vertical integration that allows for a cohesive understanding of customer needs. This disconnect can hinder their ability to effectively translate feedback from end users—such as clinicians and caregivers—back to their engineering and product development teams.

Moreover, when a product impacts multiple caregiver roles or requires collaboration among various providers, the complexity increases. Large organizations may struggle to navigate these intricacies, resulting in products that do not fully meet the needs of the healthcare ecosystem. This can lead to longer development timelines, often taking years or even decades to bring new solutions to market.

As a result, large companies often turn to acquiring or licensing innovations from smaller firms, and in some cases, they may even steal ideas from them. They leverage their influence with GPOs to suppress innovative and disruptive companies, all while attempting to circumvent patents or outright replicate a product's design and functionality. By using their GPO contract power, they can effectively push ahead in the market, sidelining the very innovators who are driving progress. This situation undermines an innovative company's commercialization strategies, which are essential for achieving a fair valuation. As a result, their valuation is negatively impacted, limiting their ability to negotiate favorable licensing or acquisition terms for a value stream they created.

Innovative companies are dedicated to tackling specific niche problems and should be valued for their contributions rather than being treated as mere commodities. Regrettably, within our healthcare supply chain culture, these small innovators are frequently simplified into basic categories on spreadsheets, often by individuals who do not fully grasp the implications of their decisions on those who provide care. Moreover, when challenges arise that affect caregivers or their patients, there is a noticeable lack of accountability for those who impose narrow product choices on caregivers who need access to better tools.

When innovative companies are blocked from accessing the market for effective commercialization strategies due to a restrictive "pay to play" system, it leads to detrimental consequences for everyone—care providers and patients included. In the end, we all bear the burden as a nation.

While our industry operates effectively, it is not fully optimized to address the challenges necessary for achieving better outcomes and accountability. The recent election has highlighted the urgent need for fresh ideas and new paradigms, paving the way for the next generation of companies dedicated to delivering optimized care and profitability. These advancements should come at the expense of corporate giants, rather than burdening those who provide or receive care. It’s time to eliminate middlemen cost burdens and gate keepers.?

Providing care is a collective effort that involves many individuals working together, and it’s essential that they have the right tools to deliver that care safely. At Infinitus Medical Technologies, we are committed to ensuring that healthcare professionals are equipped with innovative solutions that empower them to focus on what truly matters: the well-being of their patients. By supporting caregivers with effective and user-friendly resources, we can enhance collaboration and improve patient outcomes, creating a safer and more efficient healthcare environment for everyone involved.

Let's evolve together by understanding the symbiotic nature of this industry.

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