As the supply chain has shifted from a transactional support role to more of a strategic, decision-making role, supply chain is interacting with other departments with greater frequency. Multidisciplinary collaboration at an organization creates opportunities to implement significant, impactful initiatives that bring meaningful improvements to the organization. This holistic approach to complicated questions is the topic for Healthcare Business Insight’s Horizon report—a forward-looking roadmap planning our research for the year ahead. In 2019, HBI will look at supply chain’s role in the following areas: reducing process variation through product standardization, integrating supply chain into the broader financial space, tackling total cost of care, and playing a role in capital spend planning.
Reducing Process Variation Through Product Standardization
Product standardization has long been a contentious conversation between clinicians and the supply chain, often resulting in delays of standardization goals and the related benefits. However, 63% of supply chain leaders believe physicians have the most impact on these efforts, pointing to the importance of engaging physicians. Perhaps the most effective method for gaining engagement and, consequentially, buy-in, is emphasizing the impact alternative devices can have on patient care. Additionally, sharing peer-to-peer benchmarking and utilization data can help measure clinical and financial performance down to the device, factors that may convince physicians to standardize to a particular product.
Integrating Supply Chain With the Broader Financial Space
As siloes break down, the supply chain is increasingly included in broad financial conversations. Some organizations are finding cost savings and recapturing lost revenue by integrating revenue cycle, finance, and supply chain technologies like the ERP, item master, and chargemaster. Others are organizing supply chain functions like contracting and purchasing with other cost and revenue departments in a single consolidated service center to foster beneficial relationships.
Organizing Procurement Tactics Around Total Cost of Care
True total cost of care is determined by a number of factors, many of which are not currently included in the cost of care equation. When it comes to specific products, the sticker price is no longer considered the sole cost of the product. The cost impact of factors such as readmission rates or length of stay has entered the conversation. Organizations may also want to consider the cost of converting to a new product, if that is under consideration. Last, some hospitals and health systems have introduced sustainability purchasing programs that favor reprocessed devices and nontoxic cleaning products, for example, which can improve the environment while helping to contain costs.
Considering Supply Chain’s Role in Capital Expenditures
HBI noticed a trend of supply chain departments entering into, or even taking over, capital spend. Many supply chain leaders are working with facilities management on construction projects, often times ones that include vetting vendors that can offer new, more efficient, and up-to-date infrastructure systems. Supply chain can also play a role in crafting a long-term capital spending plan to establish a timeline of large purchases.
As supply chain grows in scope, the knowledge and experience of the department is proving to be an asset to other functional areas of the organization.
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