Q&A

Dave Reed is president of the Healthcare Business Solutions group inside Bloomington-based Cook Medical Inc. Since 2007, his team of 18 full-time people—aided by about 60 others throughout Cook’s organization—has worked with hospital systems, distributors of medical products, and group purchasing organizations to improve the efficiency of the business side of health care and to make sure new products contribute to that efficiency, as well as solving unmet medical needs.

IBJ: Why is Cook spending so much time trying to help hospitals be more efficient/effective?

A: For our 50 years of history, we have heavily been focused on the clinical side: nurses, physicians, clinicians, folks that touch the patient and serve the patient at the bedside. But as the complexity of health care gets greater, we felt that it’s in Cook’s best interest to try to understand and work towards an alignment between Cook and the health care services on the business side. … By ensuring that health care is delivered in a cost-effective way, so that the maximum number of patients can be served with every dollar possible, then it’s in our interest to align in new or better ways.

IBJ: On Jan. 1, a group of hospitals and medical device companies, including Cook, switched to a new system of product standardization called GS1. Describe that standardization effort and how you think it will help hospitals.

A: About 10 years ago, we said, "We want to go to a unified system that we can manage within our organization, that we can kind of push externally." The GS1 was the one standard at the time that allowed us to do that in a unified way. The GS1 standard has been used in many other industries, so we know that it works. There are a number of benefits to that. When a health system is receiving boxes of products, to be able to scan a barcode that says, this is what you have, is a lot easier than opening boxes and counting. So now the health system knows what they have in an electronic format. If you get to the point where you’re trying to manage efficiently and effectively your entire inventory, it allows you to have that capability. In the event of doing a recall, for a health system, they now can know where that product is. And payment for health care is being squeezed so much, that you want to be able to reduce costs wherever you can.

IBJ: Can you name one or two examples of how Cook’s Healthcare Business Solutions group is trying to help hospitals?

A: Sometimes it’s in the simple basic elements that most people don’t think about. How many times a day do you place an order from one of your suppliers? Every one of those processes adds costs. It can be as simple as reducing the number of times a health care customer orders. In our industry, it’s almost been a just-in-time mechanism. That has been the normal way. Air shipping a product so that it arrives the next day. That is significantly more costly than shipping it ground and having it arrive three days later. That is significantly less costly. But being able to manage an inventory, that is efficient and effective that still allows you to do the procedures at the bedside that you need, that is one the things that we have helped hospitals do.