Manufacturers, for the most part, have a limited understanding of the various market dynamics -- e.g., declining reimbursements, patient safety policies, quality assurance regulations -- impacting their customers. This lack of understanding, combined with the large amount of commodity-type products and services, has resulted in a transactional sales approach. Manufacturers of costly physician preference items that account for a high percentage of providers' total spend but receive inadequate reimbursement are creating additional financial challenges for their customers.

Supplier Issues:

• transactional versus relational approach
• tendency to focus narrowly on a single product -- what it does, its perceived value, how often it's used, and its cost per use
• practice of some specialty item producers to bypass organizational purchasing policies to sell directly to physicians
• lack of departmental/divisional interoperability
• frontline sales reps with little or no understanding of their clients' mandates or constraints

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Suppliers and manufacturers have the opportunity to become change agents rather than victims of change by developing strategic partnerships with healthcare providers. To accomplish this, they will need to develop a broader focus that includes a fuller understanding of their customers and the clinical pathway of a product through the providers’ delivery system. Also, as adequate reimbursement for broad research and development efforts becomes increasingly limited, manufacturers will become increasingly opportunistic, developing products and solutions around individual disease states.