The Soaring 20s

Jan. 23, 2020

One hundred years ago the Roaring 20s signified a post-World War I decade of economic prosperity and cultural unshackling.

Back then, hospitals were just learning to collaborate – particularly in the area of what then was known as cooperative buying and now known as group purchasing – but data sharing remained tethered to the distribution of printed materials and simple word of mouth.

Today, most data sharing has migrated to electronic distribution, accelerating and advancing to the point that machines are being programmed and taught to handle more esoteric decisions and duties typically performed by humans.

During the last two decades the healthcare industry established a virtual beachhead in the area of data sharing (e.g., electronic health/medical records, internet commerce, etc.) and data standards (e.g., GS1’s GTINs, UDI, etc.) but have yet to storm the cliffs.

Looking forward, it’s time to apply President John F. Kennedy’s 1961 “Moonshot” address to healthcare with an ambitious prediction: By the end of the decade – 2030 or 2031 for numerical “purists” – electronic data sharing and data standards will become normal operating procedure as the MDC (Medical Device Code) joins the NDC (National Drug Code) as two parts of the UPI (universal product identification) system.

Artificial intelligence (AI) and machine interoperability, combined with augmented reality for logistics and teaching, blockchain for transaction histories and records, and robotics process automation (RPA) or “bots” will speed up transactions without sacrificing accuracy. Collecting the data, synthesizing the data and analyzing the data will become second nature as the real creativity – more science than art by now – emerges in demand forecasting and predictive processes. This will represent Supply Chain’s blossoming into Fulfillment and Provision, as monumental a change as collective buying a century earlier.

Call this the Soaring 20s…of searing efficiencies.

During the Soaring 20s, Supply Chain will surpass Labor as the No. 1 cost center/expense stream in a healthcare organization. With increased scrutiny over large dollar amounts will come a sifting of the professional herd with forward-thinking top-flight executives overseeing products and purchased services from the C-suite.

Augmented intelligence of the Soaring 20s – humans bolstered and fortified by machines – will dissipate the fog that engulfs at least 50 percent of healthcare organization expenses controlled by Supply Chain. Some contend that 30 percent of organizational operating expenses (of that 50 percent perhaps?) represent areas easily encapsulated within the estimated $160-billion purchased services segment, leaving the balance to comprise GPO and individual contracted commodities and “rogue” or shadow spending made directly by departments.

By decade’s end, expect rogue purchasing diminished to the shadows.

Look for the third-party–dominated purchased services segment to expand beyond what we commonly find in the category today, but falling shy of a clinical, financial and operational gig economy. Now imagine if everyone in a healthcare facility “1099ed” themselves, removing their salaries and benefits from the labor bucket and adding their fees to the purchased services pools. Supply Chain just might be king or queen of the world. Of course, he or she shouldn’t lean against the railing with outstretched arms. Leonardo DiCaprio and Kate Winslet may have looked pretty doing it in the moving pictures but we all know what happened to the big boat.

For Supply Chain in the Soaring 20s, don’t expect any “steady as she goes” strategies but “Ford v. Ferrari” fire-in-the-belly.

SKU’d update…

No sooner had Popeyes slipped off the news cycle for its chicken sandwich supply chain debacle (See December 2019 SKU’d) than another stockout took its place – here in Illinois.

The Land of Lincoln legalized medical-turned-recreational (serious-to-loose nomenclature) marijuana as of January 1 which drew dispensary lines so long that pot retailers ran out of product after five days and $10.8 million in sales, prompting them to close their doors until they replenished supply. (Granted, one dispensary admitted it still had product but closed anyway to give its five-day, overworked employees a breather … and they surely inhaled.)

But look on the bright side. Things could have been worse had pot sales become legal the day Popeyes ran out of chicken sandwiches.

About the Author

Rick Dana Barlow | Senior Editor

Rick Dana Barlow is Senior Editor for Healthcare Purchasing News, an Endeavor Business Media publication. He can be reached at [email protected].