3 Most Common Healthcare Supply Chain Management Challenges

The top healthcare supply chain management challenges for provider organizations include provider preference items, a lack of supply chain health IT, and invisible costs.

From gauze and paper gowns to implantable medical devices and prescription drugs, provider organizations must implement efficient healthcare supply chain management processes to cut overall costs and standardize care delivery. But for many organizations, healthcare supply chain management is not as simple as tracking how items are acquired and where they go after purchase.

A December 2015 SERMO revealed that supply chain management was the second largest expense for healthcare providers.

While only one-third of the 150 surveyed hospital leaders described their organization’s supply chain management process as “very effective,” about two-thirds strongly agreed that improving healthcare supply chain management would lower costs, boost hospital revenue, and improve care quality.

Many healthcare organizations, however, face some roadblocks with making their supply chain more efficient. Some of the top healthcare supply chain management challenges include costly provider preference items, a lack of health IT implementation for supply chain functions, and limited hidden costs transparency.

The core of healthcare supply chain spending is product cost, but healthcare organizations should be aware of invisible costs associated with the supply chain, such as distribution and inventory holding expenses. To develop a healthcare supply chain management strategy that incorporates visible and hidden costs, healthcare organizations may want to consider a Lean approach.

With falling claims reimbursement rates and performance-driven payments, improving the healthcare supply chain management process is just one way to prepare healthcare organizations for the value-based reimbursement transition.

The article in its entirety may be found at: 3 Common Supply Chain Management Challenges

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