22 May Industry Consolidation
The healthcare industry is a sea of change. The last few years of healthcare reform and public policy created drastic changes to how many of us do business. A notable change is the rapid consolidation in the healthcare supply chain. Reform and cost cutting pressures are driving smaller fisher to look at ways to stay in the game. Over the last few years, we saw many vendors and suppliers merging. Now the bigger players are jumping into the merger and acquisition waters.
The last year brought the consolidation of a few industry leading distributors and group purchasing organizations. Medical Action is now part of Owens & Minor. VHA- UHC merged to form VHA-UHC Alliance. Then MedAssets was sold to VHA-UHC Alliance. These larger fish are now consolidating to become bigger fish. Increasing size, buying power, and clout within their respective arenas. The true impact of these changes on the industry is still yet to be determined but we know the game is changing.
The battle cry continues to be pushing cost out of the supply chain. This will continue. The question on the table is what your business doing to stay relevant. Being proactive and looking for ways to capitalize off the changing industry will be key for any business to keep swimming.