Risks and Opportunities for Healthcare Supply Chain in 2024: Part 1
Who better to talk about what lies ahead for the healthcare supply chain than two professionals who live and breathe it every day.
We asked Curvo CEO and Co-Founder, Andy Perry, along with Joe Jackson, Curvo Vice President of Customer Experience, for their thoughts on what’s ahead in 2024. Part 1 covers Andy’s look at strategic sourcing in the coming year. Part 2 will look at views from Joe Jackson.
Andy Perry: Four 2024 Healthcare Supply Chain Predictions
1. Average Costs for Implantable Devices Should Remain Stable
Average costs for implantable devices should stay flat or even trend downward a little, as long as everything else stays constant, and inflation remains largely under control.
What that means for suppliers and the supplier marketplace is that they are now dealing with surgeons who negotiate more than ever in the hospital setting, and so they feel that device price pressure even more.
2. More Business Model Innovation. Less Product Innovation.
Looking ahead in the near term, business model innovation for medical device companies will become more important than product innovation. You'll see R&D budgets cut or remaining flat, but with much more innovation in the way that medical device companies go to market.
Medical device suppliers are looking at ways to go to market much more digitally. In general, they are using data and technology in their sales functions to sell much more than they have before.
The medical device market will also continue to see more consolidation, so companies have a bigger footprint and more ability to represent larger product lines.
3. Risk in 2024 - Acute Care Losing More Revenue to Ambulatory
There’s a chance that if your business is primarily in acute health systems, there’s price-based risk of procedures going out to the ambulatory surgery centers (ASCs). Often what happens is surgeons will do the less-complicated, more profitable cases where they have an ownership stake. Then they bring the more complicated, more costly cases to the hospital.
It’s still a real issue for health systems to figure out and get ahead of. Hospitals remain at risk of just seeing more and more of the hard cases and the complicated ones. The acuity goes up; the case mix index goes up, but the reimbursement doesn't, so that's definitely something for health systems to pay attention to in 2024.
4. 2024 Opportunity - Partnering with Surgeons and Suppliers With Data
We expect big opportunities in 2024 for supply chains to really be a partner to surgeons. Supply Chain can accomplish this by providing the data, supplier partnerships, decision making power and platforms to help clinicians truly understand the market and options.
With more medical device companies willing to share data and partner on value and more surgeons and more executive leaders engaged on value, it’s a huge opportunity for Supply Chain to step up in 2024.
What Will 2024 Hold for Your Healthcare Supply Chain?
It’s not too late to start taking charge of medical device contracts in 2024. Let’s set up some time to show you how to prepare your healthcare supply chain for whatever the year brings.