Manufacturing a New Industry

Cuts. Cuts. Cuts. A quick scan of this issue — and the many editions before it — reveals the latest moves by others to cut the cost of care that you deliver.

How is a provider to respond? Unfortunately, Paul Newman's words in the movie “Cool Hand Luke” come to mind. Battered, bruised and nearly broken, Luke says to the Man from his knees, “Thank you, sir. May I have another?”

Indeed, providers are left with little recourse. You've been tightening your belt for so long you're wearing the buckle in the back. With no more room to squeeze, you must look elsewhere. Surely manufacturers can contribute with lower prices for their products.

Like hardboiled eggs down Cool-Hand's throat, maybe you can push just one more concession on to your vendors. If this “solution” seems feasible at the end of this article, what I'll have here is a “failure to communicate.”

Cost-Cutting Cards Have Been Played

CMS' approach is very simple: follow the money and whittle reimbursement where dollars are most significant. The push tumbles a domino onto the provider, who then pushes the manufacturer to deliver lower-cost products. But, the provider's domino comes with stipulations. Providers do not want cheaper products; the demand to manufacturers is that they not degrade quality. In fact, longer warrantees are also a requirement.

And the manufacturer? Well, not your problem, right? You've got enough to worry about. Besides, you can't trust those metal-bending scoundrels. While you struggle with cuts, they're out there spending money trying to bypass you altogether and sell directly to your patients.

Conventional thinking is that a manufacturer's job is to make, sell and service what providers need. They're big companies with clever engineers. Surely they can make cheaper, better, quieter, faster, smaller, longer-lasting products. And while they're at it, they need to design them so as not to obsolete existing inventories of parts and supplies.

Luke? Luke! Wake up, the warden's here.

Sorry to add to your many issues, but as of now, there's an additional patient the home care provider must serve, one that seems counterintuitive to help. It's your manufacturers. With their health and prosperity comes yours. The reverse is no longer true.

The stark reality is that for manufacturers, the cost-cutting cards have already been played — in spades. Manufacturers' finance, operations and efficiency experts began drastically cutting costs years ago.