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Healthcare Supply Chain Leadership Forum assesses ACA impact to date, provider leadership succession challenges
SCHAUMBURG, IL (October 5, 2016) – During Bellwether League’s 4th annual Healthcare Supply Chain Leadership Forum, speakers and attendees explored and discussed how President Obama’s Accountable Care Act (ACA) so far is influencing business and clinical decision-making as well as reshaping future leaders at healthcare provider organizations.
As part of the presentation, “ACA 6 Years Later: What’s Working, What’s Not & Implications for Supply Chain,” Mark Van Sumeren, Bellwether League Board Member and Strategic Advisor, Health Industry Advisor LLC, cited a plethora of publicly available research data giving the current healthcare reform efforts middling grades at best in the areas of access, affordability, costs and quality.
”While the major presidential candidates don’t seem to let facts get in the way of a good political argument, these facts demonstrate that ACA met several of its objectives but is failing on others.” Van Sumeren said. “Improving access to health insurance is a major win, although it has been achieved more so via Medicaid expansion than the exchanges. Affordability, moreover, is a significant and growing problem for many Americans, especially among the middle class.”
Based on Health Industry Advisor research, annual revenue growth among health plans and medical care providers eked up a notch from 2011-2015, the first few years after President Obama signed ACA into law in March 2010. In the other sectors surveyed, which included medical device manufacturers, distributors, drug manufacturers and biotechnology companies, annual revenue growth fell during the same period when compared to performance measured prior to ACA in 2006-2010.
Meanwhile, operating income among medical device suppliers and biotechnology companies rose during the early ACA years, and total returns soared for all sectors with health plans and biotechnology firms reaping the greatest surges, according to Health Industry Advisor research.
“As the saying goes, a rising tide lifts all boats,” Van Sumeren noted. “Companies across the healthcare industry have generally fared better post-ACA than prior to its enactment. This is more likely the result of an improved economy than to any specific provision within ACA.
Through his company research, Van Sumeren noticed something else, too. “One surprising thing we found, however, was that medical suppliers’ supply chains haven’t improved despite reported margin pressures, at least as reflected in inventory turn performance since 2010,” he added.
Van Sumeren’s observations and insights set the stage for fellow speaker Jamie Kowalski, Bellwether League Co-Founder and Founding Chairman, and CEO, Jamie C. Kowalski Consulting LLC, to assess how well supply chain leaders at hospitals and other healthcare facilities are navigating through industry changes.
Kowalski surveyed high-level supply chain executives at more than 100 hospitals and healthcare systems about leadership skills and succession planning – how current leaders are bobbing and weaving through existing market dynamics and whether future leaders are prepared to run with the ball. Intalere and Owens & Minor Inc. sponsored the survey.
Based on Kowalski’s research, the majority of current high-level supply chain executives at provider organizations plan to change jobs, careers or retire within the next five years. This includes current incumbents and the potential replacements for those leaving the profession in a rather short term. In fact, in 1-3 years, 19 percent of provider supply chain leaders will retire and 29 percent will depart their current employer. Within 6 years, 38 percent will retire and 54 percent will leave their current job. More than half cited this “turnover” as at least a “severe” if not “critical” concern for them and their organizations. Further, more than half responded that they have not developed a formal, written succession plan.
“Despite many high-level performers and recent advancements, provider-based supply chain leader incumbent performance is lacking, compared to supplier-based supply chain performance,” Kowalski observed, “The industry cannot accept anything but superior performance by virtually all providers. Even current “Best Practice” levels will need to be continuously redefined – efforts to reach these levels will never be finished.”
On a bright note, more than half of respondents indicated that they see an “adequate number of people available in the industry, with the skills, knowledge and experience to fill the expected supply chain leadership positions” but who may need at least 1-3 years to get up to speed.
“Given current performance levels and upcoming vacancies the open positions will need to be filled with skillful leaders that also have solid supply chain strategic and tactical acumen,” he added. “This means that efforts to develop succession plans must be turbo-charged, beginning today.”
Supply chain leaders must be proficient in a number of leadership qualities not unlike the multi-faceted leadership qualifications of a CEO, according to Kowalski. Those qualifications include strategic planning, team leading, collaboration and persuasion, in addition to the fundamentals of supply chain operations.
For access to the presentation material:
About Bellwether League
Bellwether League’s Board of Directors, a veteran group of industry advocates, selects deceased, retired and currently active professionals with a minimum of 25 years of exemplary service and leadership performance in supply chain operations that meet its criteria to be publicly recognized. Honorees demonstrate their qualifications by advancing the profession through work experience and performance and active participation in professional organizations and their communities. Future Famers represent supply chain professionals early in their healthcare careers who do not yet qualify for Bellwether consideration, but have contributed to the healthcare supply chain profession in a meaningful way.
To date, Bellwether League has honored 86 innovators, leaders and pioneers in healthcare supply chain management in five distinct categories: Education & Media, Supply Chain Management, Group Purchasing, Supplier and Consulting Services. Bellwether League also has recognized 12 Future Famers to date.
Launched in late July 2007 by a group of influential veterans in the healthcare supply chain industry, Bellwether League is a 501(c) (6) not-for-profit corporation that identifies and honors men and women who have demonstrated significant leadership in, influence on and contributions to the supply chain from healthcare providers, healthcare product manufacturers and distributors, group purchasing organizations, consulting firms, educational institutions and media outlets.
Bellwether League currently is funded by four Founding and Platinum Sponsors – Halyard Health, Owens & Minor, Premier Purchasing Partners and Vizient – and a host of additional sponsors.
For more information about Bellwether League Inc., visit www.bellwetherleague.org.
