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Inside the Pros’ Playbook for Supply Chain Sustainability


Healthcare is rapidly changing due to new technology adoption, heightened cost pressures and growing patient influence. COVID-19 further challenged providers’ pathways to financial solvency and exposed significant supply chain flaws. As a result, U.S. healthcare providers must think outside the box to drive financial recovery, growth and the continued delivery of outstanding patient care.

Providers are beginning to evolve the supply chain away from an isolated, transactional activity and toward a strategic enterprise-wide function – capable of reducing costs, optimizing efficiencies and improving margin while driving strong clinical outcomes.

In other words, the supply chain is no longer just a purchasing vehicle. It’s a key component of an organizational management strategy that should be leveraged to assess the total cost of care, across the continuum, to influence supply and clinical care choices.

Check out these game-winning calls from the pros’ playbook on strategic and nimble supply chain systems.

Identify and Tackle Inefficiencies Head-On

Managing complex supply chains is not a simple task. Oftentimes, providers’ supply chain departments recognize that their supply chain has flaws, but don’t fully understand the root causes or where to target improvement activities. Here are three things healthcare supply chain leaders can do today to address supply chain stability.

  1. Find the pain points. First, convene the appropriate internal departments to assess current processes, teams and reporting structure, and align on the primary pain points that would most benefit from supply chain optimization. A multidisciplinary team ─ including physicians and nurses, supply chain and service line leaders, and C-suite representation ─ allows for more effective communication, a better understanding of demand-and-supply scenarios, and transparency on both roadblocks and areas of promise.
  2. Determine the greatest opportunities for improvement. Use information obtained during this alignment stage to prioritize supply chain operations areas as well as service lines, purchased services and product categories that hold the greatest opportunities. Create a data-driven implementation roadmap along with opportunity estimates for cost reduction, operational enhancement and efficiency gains ─ ideally enabled via integrated business intelligence capabilities to support ongoing decision-making.
  3. Bring in the suppliers. Beyond internal team alignment, look to engage your suppliers in the true spirit of collaboration and mutually beneficial gain. Value-based contracting for medical surgical products and pharmaceuticals, for instance, can provide significant return for both hospitals and suppliers as the market continues to incent providers on outcomes.

These collaborative alignment efforts set the stage for effective strategy deployment, built on a strong foundation in which the supply chain better aligns people, process and technology across the organization.

Pull Clinicians into the Huddle

According to a recent survey from Nexera and Acurity, 66% of hospital executives said that they tie clinically integrated initiatives to their budgets; however, only 5% indicated clinical integration as a supply chain priority. And when asked if clinicians are involved in formalized supply chain utilization and procurement decisions, most senior and financial management professionals said yes – while the majority of clinical, operations and materials professionals said no.

In order to make supply chain and cost reduction initiatives truly sustainable, clinicians must have a seat at the table. Clinical integration promises advancement toward highly reliable care, cohesive operations, and symbiosis between a hospital’s supply, financial, and clinical teams, which is necessary to thrive in today’s healthcare environment.

Contemporary value analysis encourages collaboration and communication, fusing perspectives from both medical and purchasing professionals – and incorporating evidence-based, data-driven decisions to ensure clinicians have access to high-quality products at the right time and at the right price.

Value analysis decision-making accounts for issues related to quality, patient and staff safety, preference items, revenue enhancement and charge optimization across the continuum of care. In short, it enables standardization and reduced supply chain costs. For example, a California academic medical center used value analysis to standardize purchases of peripherally inserted central catheters (PICCs) to one item and reduced 30 process policies down to a single policy. The results? A 50 percent reduction in central line-associated bloodstream infections (CLABSI) rates and a full 100 percent reduction in PICC infections. A unified structure—in which supply chain, clinical and financial goals are inextricably linked via targeted clinical initiatives—is the best way to achieve meaningful results and ensure long-term success.

Drive Your Game Plan with Robust Analytics

Data is fueling the future of the healthcare supply chain ─ and advanced providers are effectively leveraging analytics to drive decision-making, standardize care and improve patient outcomes. Today’s technology can automate the supply chain, from vendor sourcing and contract management to e-payable capabilities.

Look for a strong data analytics solution that provides both clinical and supply chain teams with decision support around cost, quality, safety, outcomes and reimbursement. An all-in-one research, workflow and communications platform aids in products and services evaluation, and enables purchasing decisions that are both fiscally responsible and quality enhancing.

Data shows that tackling purchased services, for instance, can yield up to 30 percent or more in savings ─ but because these services are so disparate, it’s traditionally been a challenge for providers to gain transparency into, and reduce, the spend. Organizations with smart technology solutions can target opportunities with the largest ROI, work collaboratively with the right suppliers and effectively drive operations that support enterprise-wide strategy.

E-Commerce is also changing the healthcare purchasing landscape, particularly for non-acute providers looking to carry the Amazon shopping experience into their business models. Trusted, healthcare-focused e-Commerce platforms are allowing organizations to easily purchase items while delivering cost, time and resource efficiencies.

Put Points on the Board

As demonstrated via COVID-19, healthcare providers must build more resilient supply chains that mitigate costs without compromising care quality. Premier’s members are integrating their supply chains, physicians, clinicians and quality teams as part of a comprehensive approach to achieve optimal outcomes and financial returns.

With this transformation, the healthcare supply chain is poised to not just allow for, but accelerate high-quality, cost-effective patient care. Learn more.

Originally published in Becker's Hospital Review on Nov. 30, 2020.

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