Susan Morse

President Trump on Wednesday threatened to add new import taxes on an additional $257 billion of Chinese goods to the $200 billion established on Monday. This was in response to China on Tuesday announcing plans to impose new tariffs on $60 billion in U.S. exports. Even though it’s only a threat at this point, rather than brush it off, hospital IT executives would be smart to monitor the developments because further tariffs could bring higher prices on everyday technologies, such as computer hardware and software, not to mention consumables, pacemakers, MRI Machines and other medical equipment manufactured in China. Hospital supply chain directors, in fact, “are appropriately paranoid but cautiously optimistic,” said Peter Allen, executive vice president of sourcing operations at Vizient, which is a member of the Healthcare Supply Chain Association. Allen and others from the management consulting company have met with the top 20 hospital supply chain managers in the country. Because supply contracts through a Group Purchasing Organization are often three years long and many got renewed last year, hospitals are currently much more concerned over whether the government is going to cut 340B or Medicare reimbursement to unsustainable levels, Allen said. But Allen said, “We work everyday on pricing. It’s still a work in progress. The next question is, what’s the supplier going to do? They might just move the production to Vietnam.” The trade war began in July, when the U.S. implemented tariffs of 25 percent on $34 billion worth of Chinese imports and Beijing retaliated with its own tariffs on $16 billion worth of U.S. goods, according to CNBC. If fully implemented, the new tariffs would cover virtually all imports of Chinese goods, according to The Wall Street Journal. Two hospital supply chain directors interviewed said they won’t fully know the impact of the tariffs until they start doing their new, yearly budgets. Jerry Dea, executive director of Supply Chain Management at Cedars-Sinai in Los Angeles, will begin the budget process in February for a July 1 start to the fiscal year. The hospital has its group purchasing organization through Vizient. The consumable supply contract will keep prices stable for now, he said. “Our contract is recent and the price is locked,” Dea said. But when current contracts with suppliers expire, whether in a year or three years, the tariffs could increase prices on everything from medical devices to parts for printers and copiers, computers, furniture, machinery for paper products - which in turn could affect the cost of paper towels or toilet paper - batteries, microscopes and scientific equipment. Consumables include such high-use devices as pacemakers. Cedars Sinai purchases from 600 to 700 a year, according to Dea. Dea said he would be asking for budgetary quotes from vendors about any tariffs on the products when he starts his budget. “At that time we will go through categories of supplies to see where we’re expecting an increase,” Dea said. “Where I’m more concerned is some of the capital equipment.” For instance, MRI machines are bought on as as-needed basis. “That’s where I’m more concerned about the tariffs,” Dea said. “I still think this is one of those situations where you don’t know what you’re going to be hit with, until it comes up.” There’s also the unknown of which goods will be added to the federal exemptions list. For instance, Apple products have been given an exemption. Dea said he originally thought orthopedic implants would be a concern, and then the ortho implants were given an exemption. Cedars-Sinai uses products from Cisco, Dell and HP, companies which have all requested exemptions to the tariffs. “We buy from all those companies,” Dea said. “Our primary provider for PCs is Dell, we use a lot of Cisco Systems. Even from a technology standpoint we could be hit by these tariffs.” Reddy Gottipolu, chief supply chain officer for the Memorial Hermann Health System, said the tariffs could affect a lot of imaging items and the commodity items. Another piece that’s difficult to estimate is the impact due to the assembly that goes into a final product. Components could be made in China, but assembled in the U.S., or the other way around. They’ll know when the suppliers come back asking for price increases, he said. Gottipolu admits the tariffs have the potential to adversely impact all hospitals’ profitability and cash flow. “We just started discussing it, we haven’t seen the impact yet,” Gottipolu said. “I’m a little concerned but at the same time not too alarmed.” Allen believes that competition will help to keep prices low on supplies from China, even with the tariffs. For instance, one wheelchair manufacturer they use makes wheelchairs in China. But if their competitors do not, they can’t increase prices and stay competitive, he said. “I still think it’s a wait and see of what’s impacted and how it’s going to impact each individual system,” Dea said. Twitter: @SusanJMorse Email the writer: susan.morse@himssmedia.com

Change Healthcare on Tuesday said that its blockchain-enabled Intelligent Healthcare Network will be available on Amazon Web Services. Change’s network enables blockchain technologies for more secure and efficient financial transactions throughout the claims process. Hospitals and health insurance companies can use the cloud service to track the status of claims submissions and remittances. They will benefit from having an immutable, auditable and accessible record, as well as reduced administrative costs and near real-time claim adjudication, Change said. This takes to the next level January’s s announcement that Change’s  intelligent healthcare network is now blockchain enabled. The intelligent healthcare network is now being paired with a cloud-based network built on Amazon Web Services. "AWS's flexibility, scalability, and reliability makes them an ideal partner to extend our connectivity to the cloud and offer next-generation technologies, such as blockchain, to facilitate and speed payer-provider information exchange,” said Kris Joshi, EVP and president of Network Solutions for Change Healthcare. “Moving forward, we will enlist the expertise and technologies of other players in the healthcare space to extend the availability, functionality, and value of this network." Through its blockchain, the intelligent healthcare network can generate nearly 50 million milestone blockchain transactions per day at an average rate of 550 transactions per second, Change said. The network reaches nearly all government and commercial payers, more than 5,500 hospitals, 800,000 physicians, and 60,000 pharmacies. It handles approximately one of every five patient records in the U.S., and processes 12 billion healthcare transactions and $2 trillion in claims annually. AWS is a subsidiary of Amazon that provides on-demand cloud computing platforms to individuals, companies and governments, on a paid subscription basis. Twitter: @SusanJMorse Email the writer: susan.morse@himssmedia.com

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Apple is looking to hire engineers to develop a custom chip for more sophisticated health information tracking and applications, according to a CNBC report. CNBC said it got the information from a job posting from Apple’s Health Sensing hardware team. The July 10 job summary is for sensor ASIC architects to design, develop and launch next generation sensor technologies to enable interaction with users and the environment. Developing its own chip would also be a way for Apple to protect its intellectual property, the report said, and the custom sensor would be expected to measure information from the body. While Apple iPhones and Watch already have health-monitoring features, such as heart rate detection capabilities, the current pinnacle of optical sensing technology would be a chip for continuous blood sugar monitoring. Apple and rivals including Alphabet, Amazon and Microsoft are all building technologies that have the potential to transform the delivery of care. Amazon’s recent collaboration with Berkshire Hathaway and JPMorgan Chase to form an as-yet unidentified healthcare venture, for instance, is being closely watched as a major disruptor. Alphabet, IBM, Google, Microsoft Oracle and Salesforce just this week announced that they are undertaking the interoperability of electronic health records. And Alphabet invested $375 million in Oscar Health, with which the insurer plans to get into the Medicare Advantage business. Over the last five years, healthcare funding among the 10 largest IT companies in the United States has increased from $277 million to $2.7 billion, according to Business Insider. Twitter: @SusanJMorse Email the writer: susan.morse@himssmedia.com

New rule would advance interoperability, streamline measures accountable care organizations need to report and pay for more types of virtual visits.  

CMS is also seeking Blue Button 2.0 app developers, Verma says at second interoperability forum hosted by the Office of the National Coordinator for Health IT in Washington, D.C.

Administrator Seema Verma said listened to public feedback and is working to remove obstacles in the way of quality care.