See you in SoCal - From The Editor

The backbone of the hospital supply industry and, by the way, the backbone of our readership, is materials managers. At the risk of becoming overly lyrical in praise, the undisputable fact is that day in and day out these men and women stand guard against a range of infectious diseases that cost hospitals millions of dollars every year. Infectious diseases? Yes, the costly ailments known as overspending, overcharging, over-ordering, and the perils of a poorly standardized product formulary.

Each year, materials managers get their due, if briefly, as part of the annual meeting of the Association for Healthcare Resource and Materials Management. The 2003 event will be held later this month in San Diego and we at HPN are inviting as many materials managers as possible to stroll by our booth at the show and say hi. There's nothing better than meeting and shaking hands with the people who are unsung, but absolutely critical to making the U.S. hospital system the envy of the world.

Last month in this space, we spent some ink dissecting the Bush tax cut, an imprudent strategy that we went on record as strongly opposing as not just bad economic medicine for the nation, but as a misguided way of bringing back jobs. And job growth is the one path we have that might buoy the economy, alleviate the shocking number of uninsured and along the way, improve things for hospitals and their suppliers.

But now, even more evidence has come to light that the struggling economy could erase some solid gains in recent years by materials managers.

Data compiled by the National Governors Association and the National Association of State Budget Officers, describe "a fiscal bad dream descending into nightmare" as the languishing economy collides with spiraling healthcare costs. According to the data, 37 states have slashed a total of $14.5 billion off the current year's budgets, which negates what little positive effect the Bush tax cuts might have brought in the first place. What's more, the states have been cutting services across the board and laying off workers. Overall state spending is expected to decline next year by 0.1 percent--the first such drop since 1983--after just a 0.3 percent rise this year.

This is some very bad news for hospitals and suppliers since it limits long and short-range growth while putting more, not fewer, Americans on the healthcare dole. Costly medicine indeed. For example, the Denver Post reports that an estimated 122 employees of the Denver Health and Hospital Authority will lose their jobs this summer, and that the city's poor and uninsured will soon find clinics closed, access to prescription drugs limited and perhaps dental care gone, as the city's public health system reels under the weight of revenue loss and budget cuts. In 2002, Denver Health spent $212 million caring for the uninsured. This year, the hospital expects that number to be about $252 million. That's a difficult load for any hospital system to carry and it's likely that the hard work of materials management will be swallowed up in that torrent of red ink.

The states budget outlook has been described as the bleakest since World War II. Let's just hope that hospitals are as resilient as they seem. We know that materials managers are.

The sad fact is that the world standing of the U.S. healthcare system has been threatened. A study by the Rand Corp. says that U.S. healthcare "is simply not performing at acceptable levels." When a system hemorrhages that much money, not even the best work by materials managers can stem the flow.

COPYRIGHT 2003 Healthcare Purchasing News
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