India to Implement Country-wide e-Procurement

Coincidentally, I did a post this morning that pointed out how much further we still have to go, as an industry, in improving/automating the healthcare supply chain. Don’t get me wrong; there are stellar examples of well-practiced SCM in healthcare. But the standard deviation between those who “get it” and those who don’t is far too great in healthcare, despite the ubiquity of well-qualified GPOs, and ironically, most with one foot already in the door at virtually all provider locations.

Come to think of it, maybe that’s not an accurate statement? Case in point, I recently took a call from a venture capital firm that wanted me to sit down with the CEO of a 20 hospital for-profit system to discuss “whether the benefits of investing in supply chain management talent and tooling was worth the effort…”

Can you spell p-e-r-f-o-r-m-a-n-c-e-d-b-a-s-e-d-e-n-g-a-g-e-m-e-n-t? I hate to sound like too much of an opportunist, but how can this kind of thinking persist in developed countries, like the US and the UK?

India’s Central Medical Services Society (CMSS) just announced that it is launching a country-wide e-Procurement system. The CMSS will adopt a Materials Management Information System (MMIS) to improve the efficiency of its supply chain. Historically, India’s Health Ministry has been responsible for the procurement of drugs, vaccines, contraceptives and medical devices through agents assigned to specific disease programs. As a newly established agency, the CMSS is being empowered by the Government of India to act as a more centralized, independent and autonomous procurement agency for its healthcare industry –with transparency being front and center as a prime objective.

What drove the decision? An assessment of the current system revealed the absence of an IT-enabled supply chain management capability, characterized by the manual collection of data, a lack of a accountable MMIS for inventory management, and far too many delays in calculating demand and in the settlement of tenders. Shipment delays and higher costs were (finally) deemed intolerable.

If I had a dime for each time I have heard that the US (and the UK) are simply too large –that we cannot apply the wisdom and actions of thought leaders and expect them to work at the required scale —I’d be able to buy a cup of coffee at Starbucks. But for obvious reasons, that argument just doesn’t hold water when we’re talking about India.

If the US government can successfully motivate physician practices to adopt EHRs, then it ought to consider (I said, “consider”) the opportunities (i.e. savings and quality improvements) it could capture should it serve in some fashion as a similar catalyst to SCM practice development. Some might argue that subsidizing the adoption of EHRs was, in fact, the start, and maybe they’re right.


—Tom Finn

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