From the patient’s perspective, hospitals and medical practices always seem to have the necessary supplies on hand — like a magical, self-refilling inventory constantly stocked with tools and equipment care providers need to fight disease and improve patient outcomes.
But administrators and clinicians working behind the scenes know just how complex the process of navigating the global healthcare supply chain can be. Even something seemingly simple – say, a pair of latex gloves worn by a nurse — has an associated cost and a threshold for quality. Now multiply that consideration across every single supply used by a medical organization on a daily basis and you can see why the supply chain is so pivotal to patient outcomes and the operating budget alike.
Here are three key things to know about the global healthcare supply chain.
Hospitals (and Others) Are Prioritizing Supply Chain Improvement
Part of what makes the healthcare industry supply chain so intricate is the fact there are so many different stakeholders involved — from manufacturers to clinicians; administrators to insurance companies. From the perspective of hospitals, though, the goal continues to be achieving cost effectiveness without sacrificing quality to bolster patient outcomes and preserve their already slim margins.
Many hospitals are struggling with revenue flow. So, it makes sense they would investigate the supply chain as an opportunity to save. According to an analysis by Navigant Consulting, U.S. hospitals could save more than $25 billion by streamlining their supply chains and cutting excess expenditures. That shakes out to about $11 million per hospital annually.
Furthermore, executives are ready to act on these findings. Healthcare Dive reports about one-third of executives (33 percent) consider supply chain management a medium priority, while 65 percent call it a high priority for operational investment.
The intentions are there, but the right processes and technology are not always in place to support them.
And, of course, it’s worth noting that pharmaceutical, medical device and biotech companies are also prioritizing supply chain improvement now more than ever before to reduce waste and improve business outcomes.
Suppliers Need Technology to Keep Pace with Change
The differentiating factor determining whether healthcare orgs are actually able to tighten supply chain spending without sacrificing quality is often their approach to data analytics.
Truly effective supply chain analysis empowers users across an organization to uncover patterns, isolate trends and detect anomalies related to supply chain management and patient care. Users must also be able to act on these findings; incorporating them into decisions on what products to stock, which vendors to patronize and what supplies to use for which patients. The same advanced, self-service data analytics technology can help suppliers monitor production quotas, quality, revenue and internal processes — earning a competitive edge when it comes to buyer satisfaction and brand reputation in the healthcare world.
It’s not only a matter of keeping up with changing technology, but also keeping pace with the rapidly varying supplier and resourcing landscape present in the healthcare industry today.
One Major Challenge Is Balancing Supply Cost with Quality
As we mentioned earlier, there’s ample opportunity for healthcare organizations to streamline supply chain-related spending. The challenge is doing so without sacrificing quality.
Recalls are one worst-case scenario hospitals and practices hope to avoid for the sake of their patients. Global supply chains are so vast that quality control issues can stem from a number of places.
Case in point: More than 2,800 facilities around the world may have received contaminated surgical gowns originating from a manufacturing plant in China. The distributor had to recall more than nine million gowns citing potential surgical site infections. This just goes to show how quickly a disruption can occur within the supply chain with far-reaching effects for everyone involved.
Reducing costs does not mean sacrificing quality or working with less-than-scrupulous suppliers to save a buck. Rather, it’s a matter of identifying and eliminating inefficiencies while upholding stringent quality at every turn.
The global healthcare supply chain is complex and ever-changing, but with advanced data analytics and a well-considered strategy, organizations can navigate it successfully to maximize margins and — most importantly of all — patient outcomes.
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