Mike Alkire: Yes, it’s — first of all, it’s tough for us to delineate in that the pressures that our health systems feel in terms of utilizing inventory is all based upon expiration, right? So they’re going to try to use that product rightfully so. They’re going to try to use that product, obviously, before it expires. So we know that there’s a ton of that in the market as you would expect. Having said that, on utilization in general is so geographic. We have a number of our health systems that actually are starting to see volumes come back to normal, so, volumes that obviously are better important especially to create growth in the GPO had enough of these those elective procedures. And so we are starting to see growth in certain markets of where that’s actually occurring, but we’re not seeing it in other markets.
So it’s really hard for us to delineate given that there’s so much difference between just utilization patterns, it’s really hard for us to delineate the difference between what’s happening from a utilization standpoint, and what’s happening from an inventory management standpoint.
Craig McKasson : Yes. And the only other point I would highlight, Kevin, the focus of today’s conversation and the question has really focused on the member inventory levels. But as we also articulated there is and does continue to be excess supply in the market. There was much manufacturing done to try and anticipate and prepare for where they thought demand might be needed, because of the shortages we were seeing. An example I would give you is the State of New York had bought so much inventory that they actually continue to give away some inventory to health care providers in New York versus New York providers having to buy it. And so that excess supply issue is also sort of pushing through the channel, which needs to. And we think it’s going to get there over the next quarter or so, as we’ve talked about, but that’s another dynamic.
And so when you have all three of those, it’s hard to kind of prescriptively say, X is attributable to this, Y is attributable to that, and Z attributable to that.
Kevin Caliendo: And presumably that excess supply is mostly PP&E, or is it other stuff as well?
Craig McKasson: PP&E, yes.
Kevin Caliendo: Yes. So are you seeing anything with your customers they’re moving down? Are they doing more private label being more on formulary? Are they doing any narrow sourcing anything like that?
Mike Alkire: Yes. As you would expect, so our committed programs have continued to grow. Our SURPASS program has — it’s, I don’t know, we’re seeing a probably about an 8% or 9% growth in folks that are interested in SURPASS. And then similar levels of people that have taken advantage of our AscenDrive program. So those committed programs are picking up just as you would expect given the financial pressures that these health systems are undertaking and all of them would tell you they’d much rather figure out ways to standardize product as opposed to reduce labor.
Kevin Caliendo: You talked about pricing discipline and your openness to your suppliers to look to pass-through price. Can you talk about where you mentioned certain raw material prices and/or labor costs? Can you talk about where you’re allowing higher prices into your formulary versus maybe where some of your customers might also be allowing certain products to go through with a higher price? Like what do you accept as a higher price some of your hospitals have the option to also buy? And are you seeing any differences there.
Mike Alkire: Yes.
Kevin Caliendo: In terms of what they’re willing to pay up for — for the last year or so
