Strong Supply Chain Needs Collaboration, According to GHX

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Pharma & Healthcare Monitor Worldwide

October 12, 2018

Increasing levels of collaboration between supply chain and clinical teams, as well as improved integration of supply chain and clinical systems, will become increasingly critical to conduct value analysis, identify variation in costs and quality, and make necessary adjustments to improve patient care, according to a new analysis by data automation company GHX.


Driving the next level of innovation in healthcare will require significant collaboration throughout the industry, GHX said.

Today’s healthcare supply chain teams, which possess so much critical data and expertise, and work with nearly every stakeholder in the industry, are increasingly called upon to facilitate the collaboration necessary to attain three familiar healthcare goals: Reduce costs, increase efficiency, and improve clinical outcomes.

Today, most healthcare providers require clinicians to document supplies and implants at the point of use directly into the electronic health record. But the industry continues to struggle with accurate or complete clinical supply capture at the point of care.

A cloud-based industry-wide clinical item master can bridge the gap between item master management and the larger data set needed for EHR clinical documentation, leading to more accurate total cost-of-care analysis, according to the analysis.

When it comes to automating provider and supplier payments, payment is the “last mile” in the healthcare supply chain, according to GHX. Increased levels of automation can help facilitate significant cost savings and efficiency improvements to help overcome the high costs of inefficient, manual and error-prone payables processes.

Electronic payment processes will benefit both providers and suppliers by increasing revenue, reducing back office expenses and improving overall visibility across the procure-to-pay and order-to-cash cycles. Increased collaboration between supply chain and finance teams will open the door to improved transaction performance between providers and suppliers.

Population health, meanwhile, represents a major shift in how the industry thinks about patient care, and the way it provides that care, said GHX. The challenge of population health is matching the need with the resource, particularly once a patient is outside the four walls of the hospital.

The industry’s supply chain teams—experts in sourcing, inventory contracting, logistics and delivery—are perfectly suited to solving the challenge of connecting patients to the clinical and community resources they need to improve overall health and outcomes, according to the analysis. Providers can advance population health management by engaging with supply chain management teams.

The trend

Hospitals are increasingly looking to take costs out of their supply chain. Just this summer, the National Bureau of Economic Research found that after mergers, healthcare organizations save just 1.5% on expenses in the supply chain—somewhat surprising given that executives commonly cite savings as among the reasons for M&A in the first place.

Group purchasing organizations have been floated as a potential means of shaving off supply chain costs. When a hospital affiliates with a group purchasing organization, it does so typically to realize savings in its supply chain, and a report in August revealed that those savings can be significant, sometimes representing up to 18% of total supply chain costs.

This has a ripple effect that can result in savings across the entire healthcare system, with the industry projected to save between $392.4 and $864.4 billion between 2013 and 2022.

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