Wise to Mise?

Sharing is so the rage these days since, well, kindergarten.

We have ride-sharing opportunities through such brands as Uber and Lyft, we have car-sharing opportunities through GM’s Maven and house/room-sharing opportunities through Airbnb, to name a few. Basically, you converse with someone largely online via app or website (or even the rudimentary phone…how plebian) to bum a ride, a car or a place to stay for a fee with little-to-no-hassle, overhead or paperwork.

Just think if the healthcare industry, or any of its segments and sub-segments, could capitalize on this sharing movement?

Here’s an idea: Among the multibillion-dollar healthcare industry/marketplace, let’s start with a business sub-segment that experiences ongoing criticism, frequent federal/legal oversight, financial roller-coastering and bottom-line economic scrutiny.

Group purchasing organization contracting.

Now, now. Stop the heaving and eye-rolling. This won’t threaten or “disintermediate” the GPOs like, say, Amazon, supply data standards, distributors, IDNs, safe harbor revocation, etc. In fact, this concept actually might increase sales or at least rearrange the furniture not unlike a staging process to sell a house on some HGTV program.

For the purposes of our business school/graduate program hypothetical venture, let’s give it a name. We’ll call it “Mise,” a product or service-related contract-sharing enterprise.

Here’s how it works: Hospital A maintains a relatively healthy and sizeable contract portfolio with GPO 1. Meanwhile, Hospital B either isn’t happy with its pricing through GPO 2 or it doesn’t have access to contracting for a particular product line through GPO 2.

Hospital B contacts Hospital A about the issue. Hospital A maintains a decent contract for the product line in question, one that attracts the interest of Hospital B. As a result, Hospital B works through Mise to “broker” access to Hospital A’s contract for that product line. Hospital B pays Mise for the volume plus the customary 3 percent administrative fee it requires to complete the deal.

The rudimentary math works something like this: If Hospital A has a contract price that’s 15 percent lower than Hospital B’s, then Hospital B saves at least 12 percent going through Mise. Plus, depending on GPO 1’s model, Hospital A could earn a higher dividend/rebate check, a portion of which would return to Mise to be shared with Hospital B. The portion could be calculated as the percentage of purchasing volume that Hospital B brings to Hospital A.

Mise solves a number of challenges befalling the group purchasing marketplace.

1. Mise encourages healthcare facilities to use group contracting potentially to save money on products and/or services they need and apparently can’t achieve on their own or through their existing GPO relationships. (Uber: Cheaper than traditional taxicabs or owning your own vehicle!)
2. Mise encourages healthcare facilities to become familiar with how various GPOs operate and work, gaining insights into customer service and service performance. (Airbnb: Meet/work with new people!)
3. Mise enables healthcare facilities to increase their compliance levels under committed contracting programs with the additional cooperative purchasing power.
4. Mise triggers higher discount tiers through traditional contracting.
5. Mise helps to generate additional dividend/rebate revenue for participating organizations.
6. Mise satisfies the seemingly endless debate about physician preference items by granting the demanding doctor what he wants from the supplier that woos him all at a conveniently lower-than-what-ordinarily-would-be-expected price.

While this concept likely won’t qualify for the rotating quintet of celebrity investors on TV’s “Shark Tank” (And for that reason, I’m out!), it may be worth your contemplations and musings.

Some might question the legality of Mise, citing all kinds of privacy issues and confidentiality clauses, threatening the demise of Mise.

But you have to admit, among the lows and highs, the thought of Mise flies … at least among the wise guys.