So the point would be to establish a cost target for the medical device that allowed for a reasonable contribution margin for the provider and the manufacturer so that both win. In high-tech manufacturing, this is done all the time. In health care, it would require strategic partnerships at a level where device manufacturers partner and plan a product roadmap based on projected reimbursement (cost for manufacturer) and an agreed upon margin for provider and manufacturer. The effort required changing the thinking of manufacturers and (probably) group purchasing organizations cannot be overstated, but would be essential for this next step in the innovation necessary for the health care supply chain.
About the author:
Tony Benedict is Vice President of Supply Chain for Vanguard Health Systems at Abrazo Health Care in Arizona. He is currently serving as President and Director of Board of Directors for the Association of Business Process Management Professionals International. Most recently Benedict was Senior Manager of Supply Chain Strategy at Tata Consultancy Services where he was brought on board as one of 10 consultants in the U.S. to develop opportunities in the manufacturing, health care, and high tech industries for the company’s newly formed global consulting practice.
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