Hospitals take care of people first and foremost, but they are also businesses that need to be run well. Troy Kirchenbauer, general manager of Aptitude LLC, discussed Tuesday the importance of good supply chain management at U.S. News & World Report’s inaugural Hospital of Tomorrow conference. Kirchenbauer’s company, Aptitude LLC, created an online direct contract market for healthcare. It may not be the most exciting aspect of the industry, but it’s an integral part of keeping costs down and exploiting new technology for good, Kirchenbauer says.
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Here are some highlights of his panel:
- At the macro level, transparency and technology can and should be driving down the backend cost of healthcare such as negotiating and managing contracts. Aptitude built a platform to address that goal.
- Aptitude’s direct contract marketing approach reflects three tenets: open competition, allow all players to bid equally on the business; transparency between buyers and sellers, a system that allows buyers to figure out what is a good price and last but not least, compliance, enforce contracts.
- The way most hospitals manage supplier contracts today, through spreadsheets and email, is “time consuming and costly,” Kirchenbauer says. “It creates a lot of waste and rework in the process.”
- When a system like Aptitude is used, Kirchenauer says, it reduces the burden on hospitals to manage backend costs and saves money. With aptitude simplifying and streamlining the business side of the equation, Hospitals can dedicate more of its resources to care.
- Aptitude makes money off a small fee on transactions.
- “What we are seeing today is that there is an enormous value proposition to suppliers as well,” Kirchenbauer says. The platform reduces risk for suppliers so they are incentivized to join, according to Kirchenbauer.
- The company also provides analysis for hospitals allowing them to see how much savings could be derived depending on whom they choose as suppliers.
The bottom line: We can’t ignore investments in technology that supports the business of healthcare, Kirchenbaur says. Health executives are looking to supply chain management for ways to cut down costs. The healthcare industry should harness the power of technology to find meaningful savings for all stakeholders.