K.C. Meleski is vice president of sales at CME Corp., a medical equipment supplier based in Warwick. The company, which distributes more than 2 million products from upward of 2,000 manufacturers nationwide, recently signed a contract with Gastrologix, a group purchasing organization focused on gastrointestinal practices.
Meleski shares details on the contract, how the deal will benefit GI practices in Rhode Island and across the country and discusses the state of the medical supply chain in relation to the COVID-19 pandemic.
PBN: How will CME’s new contract with Gastrologix work, and when will it officially begin?
MELESKI: The new contract with Gastrologix GPO [group purchasing organization] began on May 19, 2021. Members of the GPO will be able to purchase equipment, direct-to-site logistics services and technical services through CME.
CME distributes over 2 million products from 2,000-plus manufacturers. CME covers a myriad of product categories used by GI’s. Medical categories include exam room, patient monitoring, surgical, diagnostic, endoscopy, imaging and cold storage equipment. Nonmedical categories include furniture, break-room, appliances and janitorial items.
Logistics services include complete white-glove, product tracking software, project management, storage, assembly, installation and trash removal. Technical services include preventive maintenance contracts, staffing solutions, IT [information technology] hardware, asset-tagging and startup electrical checks, and inventory management.
PBN: Roughly how many Gastrologix members in Rhode Island will be able to take advantage of its contract with CME?
MELESKI: There is currently one member, University Gastroenterology. UGI has been serving southern New England for over 30 years. They have four locations, 33 practitioners and a wide array of on-site services. Because of their diverse offerings, CME can be a critical partner in outfitting their facilities and maintaining their equipment while saving them money and improving efficiencies.
PBN: How is the deal poised to help GI practices?
MELESKI: The contract will give Gastrologix members access to CME’s unmatched ability to provide savings and efficiencies on health care equipment, logistics and technical services throughout the U.S. Because of their size and equipment focus, CME can offer very competitive pricing on a wide array of products – a one-stop shop for outfitting GI practices. Our trained account managers can aid the practices on finding the best equipment for their needs at the best value. CME can arrange demos or side-by-side comparisons of most items.
When outfitting a new facility or upgrading/replacing current equipment, CME’s expertise in logistics is invaluable and efficient. CME can get the product ordered, shipped to a local CME service center, assembled, asset-tagged, staged, delivered and installed into the designated rooms within the facility. The services are turn-key and designed to manage the entire process.
A proprietary software program, CME360 Project Management System, tracks the products’ whereabouts and the CME project management team seamlessly coordinates the process to ensure all the equipment arrives on time and is scheduled for delivery at a time that is convenient for the GI practice.
On top of all of that, our technical services team can provide startup electrical checks on the new equipment to make sure the equipment is safe and ready to be used on patients when needed.
PBN: How is the medical supply chain doing now as compared with last year at this time, when COVID-19 cases were surging across the U.S. and much of the world?
MELESKI: The supply chain is still under a lot of stress. The PPE [personal protective equipment] shortages experienced last year have dissipated, but now other products are in demand. Health care providers brought in excess PPE inventory during the peak of COVID to help ensure they would have enough on hand to protect their staff. Now that demand for PPE is falling, they are pulling from that inventory and in turn ordering even less than they are actually using. This is creating a difficult situation for both manufacturers that ramped up production capabilities and distributors that brought in a lot of PPE inventory to meet the needs of their clients.
Many of the companies that scaled up domestic PPE manufacturing are struggling, as they can’t compete with products manufactured overseas that have far lower labor rates. I believe the federal government needs to create incentives for the health care providers in our country to buy from U.S. manufacturers, and to collaborate with the U.S. health care distribution network to have excess on-hand products, so we are better protected as a country for the next pandemic.
We now know that exam and specialty gloves will become scarce due to a COVID-19 lockdown in Malaysia (over 50% of all gloves are manufactured there) and the shipping backups in all of the U.S. ports.
There are also shortages in materials such as steel, aluminum and foam, to name a few. That lengthens lead times for some of the equipment used in GI practices. It also has increased prices all along the supply chain.
PBN: Are there any challenges that remain for smaller businesses such as nursing homes and community health care providers that are trying to maintain adequate supplies of PPE for employees?
MELESKI: There are two new and significant challenges that are impacting the clients we serve – inflation and lead times. In the 20 years I have been in health care distribution, we are seeing more widespread and unscheduled price increases from our manufacturers today than at any other point in my career. Many small health care providers are facing increased costs for labor and shrinking profit margins – and these increased product costs will be a challenge for them to navigate.
With respect to lead times, we are now seeing lead times of 16 weeks on products that have historically taken four weeks to receive. Smaller providers don’t have as much excess product and when a piece of equipment breaks and they have to wait an excessive amount of time to get a replacement, this can have a negative impact on revenue.
Elizabeth Graham is a PBN contributing writer.
