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IDN SUMMIT
NOTABLE INDUSTRY TRENDS TO WATCH
➤ Political focus on the cost of and access to
specialty drugs and biologics will continue
➤ Patient engagement becoming priority due to
value based business model
➤ The pace of experimentation with Alternative
Payment Models (APMs) is poised to accelerate
due to MACRA of 2015
➤ Out of pocket costs are increases due to rising
drug costs and value based purchasing
Avalere published their 2016 trends – we look GREAT!
➤ Medicare FFS is increasingly being tied to
quality and value – pace will accelerate
➤ Most acute and post-acute care providers are
facing lower Medicare payments based upon
market baskets
➤ Consolidation will continue as providers
integrate horizontally and vertically – post
acute
➤ Get ready for risk based capitation of some
form or another
NOTE: Supply Chain was not mentioned in the data analysis and report
TOP 5 HEALTH REFORM CONCERNS
➤ Reduce operating costs — 78 percent
➤ Shift to value-based purchasing — 66 percent
➤ Alignment of provider and payer incentives — 65 percent
➤ Align with physicians more closely — 54 percent
➤ Develop information systems integrated with primary care
physicians — 48 percent
Source: The American College of Healthcare Executives 2015 survey
Notice what is still NOT mentioned! But can supply chain impact each area of concern?
COSTS ARE SKYROCKETINGPharmacy Leads the Way…
“The emerging issue in
healthcare is drug costs.
Drug spending represents just
10% of overall health
spending. But the number of
transactions people have
with the health system is
much larger for drugs than
for physician visits or hospital
stays or other services - and
the cost is very immediate
and tangible.”
WSJ – 9/9/2015
COSTS ARE SKYROCKETINGDiabetes is a common example
Acute Care Hospitals
3,515
Clinics 33,197
Long Term Care Facilities
10,361
Physicians (hospital based)
235
Ambulatory Surgery Centers
3,354
Emergency Services
1,207
Other 33,532
Total 85,401
MembershipSpend Under Contract
Market Share
9.2 Billion in
products and services
flow through our
contract portfolio
Large Enough to
drive value, Small
enough to listen
**This will be retained!
AMONG A FIELD OF FEW, AMERINET GOT RESULTSAmerinet was known for its ethics, people, breadth
ALONG COMES INTERMOUNTAIN HEALTHCARECentral Question: Could they do something different, like they have done for decades?
HIGHLY INTEGRATED HEALTH SYSTEMOur Charge: Become a model to the industry
Since 1975• 22 hospitals• 2,784 licensed beds
Since 1983• Health plans• 730,000+ members
Since 1994• 1,200 employed physicians• 558 advanced practice clinicians• 30 Instacare Clinics
Since 1997• 10 key service lines
Hospitals
SelectHealth
Medical Group
Clinical Programs
WHY DID INTERMOUNTAIN BUY AMERINET?
➤ To make a difference
➤ To be a model to the industry
➤ Share Intermountain’s best practices – both supply chain
and clinical
➤ Leverage Amerinet’s assets
➤ Help Amerinet get back to “winning”
OUR MISSION
Elevating the operational health of America’s healthcare providers
This is our noble purpose and our rallying cry. It is why we exist. We do more than provide products for healthcare organizations.
Our mission is to elevate the healthcare operations for each client we serve. “Operations” in this case encompasses every aspect of
healthcare, including patient care. As each single organization improves, healthcare as a whole across our
nation will be elevated.
OUR VISION
Be the essential partner for operational excellence in healthcare
Our vision defines what we aspire to be. We see ourselves as more than just a partner. We will be the essential partner for
healthcare organizations pursuing operational excellence.This means hospitals, clinics, and health systems will seek usout because they know we are crucial to their improvement
and success.
WHAT ARE WE NOW AND IN THE FUTURE?
Intalere will
be a professional
Supply Chain
organization that
has a GPO as
one of it’s
product offerings
A FEW GUIDING PRINCIPLES…
OUR PHILOSOPHY IS DIFFERENT. WE BELIEVE THAT:
Supply Chain is Strategic to healthcare
The current GPO industry has lost focus on the supply chain
Supply chain is more than a portfolio of contracts, and aggregation is only a part of the solution
There is a need for a total supply chain solution that enables you to optimize the management of your entire spend
OUR SCOPE OF OFFERING IS DIFFERENT:
The entire continuum of healthcare delivery
All spend categories
All supply chain functions from source to settle
OUR APPROACH IS DIFFERENT:
Our provider centric approach can meet you at your current level of maturity and enhance your capability
Combining Intalere’s GPO, consulting, and technology with Intermountain’s clinically driven supply chain is unique
WORKING TO ELEVATE THE SUPPLY CHAIN
➤ Freight Costs
➤ Procure to Pay
➤ Logistics/Distribution
➤ Expired/Damaged Product
➤ Payment Terms
➤ Inventory Carrying Costs
➤ Physician Preference Costs
➤ Standardization Costs
We are the only industry that keeps it locked away downstairs
What do I pay ?
What do my processes
cost?
How do work process affect vendor costs?
Easy
Hard
40 – 50% of an organization’s spend is supply chain related
WHAT ARE WE DOING ABOUT THESE TRENDSResponding with products and services to fix the pain - INNOVATION
Process
Technology
People
Strategy Implementation Operations
ConsultingOperations (Outsourcing +
Professional Services)
Technology Solutions
Outsourced employees
Approach highly dependent on
technology and people
Technology enables all
services
THE LEAVE-BEHIND
Total Clinically Driven Supply Chain Management Solutions
WE WILL FIX PROBLEMS THROUGH INNOVATIONFix the core while building new products and services
Core GPO
will be Committed
iCCP
Supply Chain
Consulting
Precision Genomics
ProComp
Expanded Rx
Offering
Rural & Telehealth
We recognize the market demands Intermountain Health’s
innovation. While we will be strengthening the core and
building a best in class consultingorganization, Intermountain
Health will invest heavily into commercializing their unique
approach to drive down cost and increase quality.
TECHNOLOGY TRENDSAutomotive R&D Investment Outpaces Aerospace
2014 Innovation Report – AutoAlliance.org, Booz & Co
OUR TECHNOLOGY FOOTPRINT FUTURE STATEThe future state gets us a full analytic for clinically driven supply chain
➤ The GPO Spend section has been the 29
yr focus of all capital investment
➤ ROYS is the Rest of Your Spend…how do
we infuse those metrics into day to day
operations of the supply chain?
➤ Utilization Management is the next phase
of sophistication
➤ UM lies at the heart of a clinically driven
supply chain. How do we compare?
➤ We are not getting distracted with the
next shiny object!!
CONSULTING EXPERTISE IS ROBUSTOur focus is the entirety of the supply chain, not just supply cost
CONSULTATIVE SERVICES DRIVE CHANGEWe are with you throughout execution to solve problems
➤We will assess status quo
➤We will teach a better way
➤We will consult with you unlike other
episodic strategy consulting firms
➤Outsourcing is becoming COMMON
– We will even have our people
onsite to drive value
➤ Intermountain knows a clinical
supply chain
WHY DOES ALL THIS MATTER TO YOUWith all the changes in the GPO space, that’s the central question
➤ Look at all the changes in the GPO space! The big ones are placing bets on lower
cost of contract to squeeze price and increase shareback to buy business
➤We will focus on price as a management function, but will prepare our customers for
capitation by focusing on the whole supply chain – financial models will change
➤We will continue to focus on non-acute. Key area that extends the continuum.
➤Do you want to be part of our strategy, not just as a GPO partner?
➤Everyone has a “committed program.” How is ours different? 80/80, rules for
suppliers and members in or out, we track compliance electronically not the supplier
➤Does our different approach with provider led backing resonate with you?
➤We are going to fix healthcare one system at a time and we need YOU!
