As one of healthcare’s largest medical and laboratory products distributors, Cardinal Health also serves as a medical products manufacturer with a robust portfolio. Our Cardinal Health™ Brand includes a comprehensive offering of both clinically differentiated, market-leading specialty products and devices and physician-preferred core products and supplies. “The mix of products in our portfolio helps meet our customers’ needs for both quality and savings,” explained Kelley Moffett, senior vice president of Global Medical Products.
Products in the specialty category are differentiated by unique features to aid in delivering positive patient outcomes. These include enteral feeding pumps and other feeding products for adults, children, and infants in our nutritional delivery portfolio, as well as products in our compression portfolio that help prevent deep vein thrombosis (DVT) and pulmonary embolism (PE) (medical conditions that occur when a blood clot forms in the vein). Our monitoring, diagnostic and defibrillation electrocardiography products also fall within this category.
The Cardinal Health™ Brand core category consists of cost-effective, high-use products. These include personal protective equipment (PPE) like exam gloves, masks, drapes, gowns, traditional wound care products, incontinence products and many more. “From the piece of gauze that goes on a child’s skinned knee to the syringes patients with diabetes use every day, and the extremely personal products in our incontinence business, these core products help keep hospital systems and physician offices running smoothly,” Moffett said.
Scott Donnelly, senior vice president of marketing and commercial enablement within the U.S. Medical Products and Distribution (U.S. MPD) business added, “All of these products are very important to our customers; many of them want both our specialty and core product offerings for their patient care needs. Having both categories allows us to add value for our customers in a way that our competitors cannot.”
Customers span the healthcare continuum, from neonatal care to at-home and end-of-life care. We have long served some of the largest health systems in the United States – manufacturing and distributing Cardinal Health™ Brand products to acute-care hospitals, ambulatory surgery centers and integrated delivery networks (groups of healthcare providers that provide coordinated patient care). Cardinal Health also distributes products to labs, skilled nursing facilities and long-term acute-care hospitals. Our distribution network has also expanded to include lower-acuity settings, such as retail and urgent care clinics, which have proliferated in response to patients’ demands.
Uniquely positioned to support customers
Because Cardinal Health both manufactures and distributes a differentiated portfolio of products and services, we can provide unique benefits to customers, explained Donnelly. “Customers want to buy from a distributor with a robust product portfolio; there is additional value for the customer when their distributor is also a manufacturer of many of the products they buy.”
In addition, “as a manufacturer, we help ensure consistent quality and safety, and provide comprehensive knowledge and expertise about our products. At the same time, our customers know that we are experts in distribution, and accountable for helping to make sure that the supplies they need are available when they need them.” To further Cardinal Health’s distribution strengths, U.S. MPD is investing in the expertise of its employees, adding physical inventory space to its network and increasing the use of automation in its warehouses.
Donnelly and Moffett represent two critical teams that work hand in hand to drive Cardinal Health™ Brand product demand, new product development and pricing. The commercial enablement organization is a customer-centric and growth-minded team responsible for leading customer and solutions marketing, customer lifecycle management and commercial operations across our acute, non-acute and lab businesses.
The global medical products team develops holistic lifecycle portfolio management through product development and comprehensive product strategies – putting the customer at the center of decision-making to deliver the right product to the right customer at the right place and time. This team also works closely with our manufacturing and procurement teams for appropriate self-manufacturing or product sourcing planning. Together, these teams share and carefully study customer demand, market trends and performance data, in addition to developing comprehensive pricing strategies.
“We watch trends closely to predict where healthcare practices are going, and where various procedures are going to be done,” Donnelly said. “Paying attention to these market trends helps us keep our portfolio relevant.”
Both teams, in partnership with many others across our organization, are focused on growing the Cardinal Health™ Brand portfolio by investing in both product innovation and capacity in manufacturing facilities and our distribution network. “These investments are enabling a differentiated product mix with an aim to best serve our customers’ needs and positively impact patient care,” Donnelly said.
Customers are taking notice, he said. “We conduct a ‘voice of the customer’ survey every six months and over the past two years, we’ve seen a steady increase in our customer loyalty score. One of the biggest factors customers name is the availability of Cardinal Health™ Brand products and the breadth of the portfolio.”
A renewed focus on product development
Our investments in new products and innovations within the Cardinal Health™ Brand portfolio are also increasing business resiliency for the long term, Moffett said. “As we consider new products and innovations, we’re anticipating what our customers will need tomorrow to continue to provide the best care for their patients.” Currently, her team is particularly focused on nutritional delivery, compression devices, and the Sustainable Technologies™ business.
Nutritional delivery: We recently announced the launch of our next-generation NTrainer™ System 2.0, a device designed to help newborns and infants born prematurely develop the oral skills they need to transition to independent feeding by reinforcing non-nutritive suck. Preterm babies may be born before they’ve had a chance to develop the ability to suck, swallow and breathe in a coordinated way; they must rely on feeding tubes for their nutrition until they develop these skills. “The NTrainer™ is designed to accelerate the development of non-nutritive suck skills, which means the baby can get off a feeding tube and out of the NICU sooner,” Moffett said. The second-generation system provides clinicians with real-time data to track an infant’s progress. It is also smaller, more intuitive and easier to integrate into NICU feeding protocols than its predecessor.
In addition, we are launching the next generation Kangaroo OMNI™ Enteral Feeding Pump this month. Building on the 30-year legacy of the Kangaroo™ brand, the Kangaroo OMNI™ is enhanced with new features from previous Kangaroo™ systems and is designed to help provide enteral feeding patients with more options to meet their personalized needs. The Kangaroo OMNI™ Enteral Feeding Pump with Kangaroo OMNI™ Feeding Sets are indicated for use in patients, ages infant and older, who are physically unable to eat and swallow or who are unable to get sufficient nutrition through eating and swallowing.
Compression: Our compression portfolio features Sequential Compression Devices (SCDs) and other products that increase venous blood flow in at-risk patients, helping to prevent DVT and pulmonary embolism (PE). The SCDs have a controller and sleeves for the legs and feet that apply intermittent pneumatic compression, which enhances circulation and moves blood in the lower limbs. “The first 72 hours after surgery are when the patient is most vulnerable to blood clots,” Moffett said. The Kendall SCD devices help clinicians prevent these life-threatening clots through mechanical prophylaxis and compliance monitoring.
Sustainable Technologies™ business: Through Sustainable Technologies™, we reprocess a variety of single-use medical devices, including compression sleeves, electrocardiogram lead wires and cables, air transfer mats (used to transfer and reposition patients), pneumatic tourniquet cuffs, pressure infusion bags, pulse oximetry sensors, and many products used in surgery, including ablation wands and electrodes, arthroscopic abraders and shavers, orthopedic manual devices and more. Reprocessing extends the life of these medical devices and reduces both product cost and waste.
Last year, Sustainable Technologies™ completed an expansion of its facility near Tampa, Florida. The facility is now twice the size of the original, providing needed space to test new ways of reprocessing products that aren’t yet in our portfolio.
“Innovations throughout our Cardinal Health branded portfolio are likely to continue,” Moffett said. Her team is at various stages of research and testing innovations in the electrodes, surgical drapes and incontinence products, and developing new products and services for long-term care and home care.
Managing the portfolio lifecycle
Just as developing new products is critical, so is careful portfolio lifecycle management, Moffett explained. “We launched the portfolio lifecycle management initiative for the Cardinal Health™ Brand for one reason,” she said. “We want to be sure that we’re investing in the right areas of the business to provide customers with what they need, and we want to exit those product categories that we simply don’t have great reasons to stay in.”
Portfolio lifecycle management is about responding to a few simple questions, and taking action on the responses, Moffett said. “What do our customers value that we make, source and distribute? Do we make or source products that our customers don’t expect from us, or that another company could make or source just as well or better? Do we offer products in our specialty category that are no longer clinically differentiated? We want to invest in the products that our customers want and need from us and and partner with strategic National Brand suppliers through our Performance Plus program to round out our offering.
The removal of some products is a matter of practicality, Donnelly said. “For example, we’ve had duplicative products in our portfolio, as a result of acquisitions, and have inventoried some non-standard items that only a few customers wanted. Both of these are examples of things that didn’t provide benefit to our customers, and that were expensive for us to maintain and process.” Other products that may be removed from the portfolio are those that have matured, with a crowded category where there are few opportunities for product differentiation.
Poised for the future
“We’re balanced and focused as we drive product development and innovative solutions to manage our portfolio lifecycle,” Moffett said. “Balance means showing up for our customers as both a quality medical products manufacturer and a distribution expert. Focus means pushing ourselves to accomplish what we’ve promised to our customers, to Cardinal Health and to our shareholders, and at the same time, keeping our eyes on healthcare’s future needs. We’re establishing the right processes and investing in the right innovations. These are the things that allow us to be a valued distributor and manufacturer to our customers.”
Donnelly added, “We’re continually focused on our customers’ needs, because that’s where the opportunities are for us, for our customers, and for the patients they serve. When we do this right, we enable our customers to better care for their patients. We help move healthcare forward.”