With the reform versus repeal debate raging, I thought I would share some interesting facts that I’ve collected characterizing the current state of the healthcare industry:

Insurance

55.8%

Percentage of people covered by employer-provided health insurance

8.8%

Healthcare premium increase employers can expect to pay for their employees in 2011, the largest increase in 5 years. Employees can expect to pay 12.4% more.

Read the rest of this entry »

The following excerpts were my responses to select questions at a recent private equity conference on investing in healthcare.

1. How would you describe the general operating environment for your clients and their CEOs in 2010? How does the operating environment now compare to last year as well as pre-2008?

What happened in 2008-2009 really changed a lot of people’s perspectives. Who would have thought that the demand for elective surgeries, dental care, and veterinary care would have seen the drop-off that it did? Read the rest of this entry »

Healthcare providers are at the epicenter of industry reform. In what will be an era of unprecedented focus on costs, operational effectiveness presents an unprecedented opportunity to improve the patient experience and concurrently drive tangible bottom-line results.

A transformation simply must occur to respond to changing consumer expectations, increasing patient choices, falling reimbursement rates, and payer pressures that make reducing costs and improving productivity an imperative. Though this is not the complete answer, as a proxy for the current state of focus on operational effectiveness, it is interesting to quantify the adoption of Lean and Six Sigma in hospitals: Read the rest of this entry »

Too many months of the Great Recession.
Your budget, your headcount; please: not one more concession!
For a year 20-10 that really is great,
Make a commitment to IN-NO-VATE.

From here it’s about Growth,
Whatever your ‘new reality’. Read the rest of this entry »

The economic difficulties of the past two years have had a direct and often disruptive impact on global supply chains. A study by Aberdeen Group published in October titled “The Supply Chain Executive’s Agenda 2009: Weathering the Recession” is available here.

Generally, the top supply chain disruptions have been related to reductions in demand and volatility in prices for raw materials, commodities and fuel. Many companies have also experienced disruptions in their supply chain operations due to deterioration of their own or their suppliers’ financial condition.

The reported top pressures driving companies to improve supply chain management are: Read the rest of this entry »

It is estimated that 60 – 80% of the cost of meeting a customer demand is an administrative (or non-production-related) function and up to 95% of the time it takes to respond is “non-value added” time that the order – quote – design – invoice – etcetera spends waiting in queue someplace. Research also suggests that white collar workers are little as 40% productive… so the possibilities for improvement are enormous.

When Starbucks jumps onboard, you know Lean has some runway left. The frontier of Lean deployment today is in healthcare, government, service and “transactional” industries – and in the front and back office operations of manufacturing companies. Read the rest of this entry »

Mitigating supply risk is now near the top of the CPO’s agenda – in fact, it immediately follows cost reduction in priority, according to a recent study. 71% of global procurement executives surveyed indicated an increasing focus on supply risk over the past 18 months, according to Aberdeen Group’s April report, The CPO’s Agenda 2009. It is no wonder: from Aberdeen Group’s survey last year reporting that 58% of companies suffered financial losses as a result of supply chain disruptions, to A.T. Kearney’s forecast earlier this year that half of U.S. automotive suppliers could go bankrupt, awareness of the risks of business interruption from problems in the supply chain has hit the executive agenda. Yet, only 30% of companies have a formal supply risk program in place. Read the rest of this entry »

Once upon a time, there were three little companies who supplied a variety of products to a fickle consumer: a retailer, a branded consumer products company, and a computer manufacturer. The branded products company stood up and declared, “There is value in our brand!” and they went about their business by adding to their portfolio of offerings by buying complementary companies so that they could put their name on these products too, while the retailer was happy to eek out a meager profit of a couple percentage points of revenue and chase economies of scale through store openings and geographic acquisitions. About the same time, there was a manufacturer of computers that decided they could eliminate the middleman markup and offer their products directly to the consumer and they built an innovative model that would be studied extensively in future years. And life was good; but then things changed. Read the rest of this entry »

Companies simply cannot keep squeezing costs the same ways without eventually compromising the value these activities provide. There are other methods to achieve bolder reductions without undermining the core functional capabilities needed to keep the business performing and achieving above-market growth. Consider a two-step approach to rapidly identify the sources of your business value and simplification opportunities for significant cost reduction and profit improvement based on proven leading practices. Read the rest of this entry »

From the C-suite, the operations function is sometimes viewed as a cost-center or a tactical, “necessary” (gasp!) activity with a focus strictly on cost reduction in a few narrow areas. Today, however, many companies have realized that supply chain management can be much more strategic, delivering capabilities that allow a company to outperform the competition – in terms of both agility and the effect on shareholder value. Supply Chain earns its place at the executive table as a strategic function when the company makes the connection to the financial implications of superior performance. Read the rest of this entry »