Posts from — July 2008

The result of this embarrassing defeat for Bush is that National Competitive Bidding is delayed for 18 - 24 months. The homecare industry will however concede 9,5% in price reductions on previously awarded NCB products.

When the rollback of awarded contracts will happen has yet to be determined, as will be the numerous law suits that are / will be issued as a result of companies having been awarded, and now denied contract awards.

What a mess.

More from CNN here

New consumer company parent Phillips will no doubt be pleased with the recently announced direct ship to consumer program that Respironics has instituted in the United States for several of it’s obstructive sleep apnea consumables.

Full details are available from their sleepapnea site which lists their business provider services.

The service provides suppliers the opportunity of having sleep apnea supplies shipped directly to consumers homes, thus eliminating one additional step in the supply chain. The local supplier simply places the order online, elects to have the goods shipped directly to the consumers point of use - and that’s it. The supplier retains their customer without having to bother with inventory, logistics and other unwelcome costs.

Smart innovative move in the current industry environment where innovation in some cases seems to have taken a back seat to Medicare and competitive bigging squabbles.

You will recall two days ago the market noise that Resmed was about to be picked up by German Linde. We blogged about it here.

Now CNBC’s Jim Cramer talked about them benefiting from the potential reversal or low impact of competitive bidding. (I don’t think competitive bidding will be substantially reversed just to be clear.

Jim Cramer goes on to issue a potential target price of $53 which is a cool 30% premium.

The program officially started today, with all the competing and conflicting flavors of a bitter sweet chocolate. Despite a last minute lobbying effort - and one missing vote, at least 3 failed lawsuits - the program started.

“Industry” is saying that there is still a chance it will be reversed (temporarily) however that’s a long shot.

I used quotes when using the word “industry” because - industry was late to the party in presenting a united front and in the later stages “industry” unraveled somewhat when companies awarded contracts protested about delays to implementing the program, as well as arguments over higher and lower spec products being included (see Scooter Store) etc. The approach was also somewhat un-imaginative with the usual “lots of companies will go out of business, we provide services that cannot be obtained elsewhere etc.. to which the opposition cried the free market ethic, “If you cannot compete you deserve to go out of business”… and so on.

The main issue of course was an industry that did not recognize the seriousness of needing to provide cost savings to one of their biggest customers - namely Medicare.

There is no doubt in my mind that serious companies have been making contingency plans for this eventuality, and it is these that will ultimately win, as they had the vision to succeed - no matter what.

For all others, with all sincerity - go read “Who moved My Cheese“.

(You may be interested in our take on the NYT post a few days ago.