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By John Strong, Co-founder and Chief Consulting Officer, Access Strategy Partners Inc

Is your supply chain strategy aligned with what your C-suite is thinking about?

In most industries supply chain excellence is considered a key strategic initiative. In healthcare, where supply chain managed products and services fall right behind labor as the most expensive items, it is often not the case. Where supply chain management is prioritized it can mean the difference between profit or loss, amounting to millions of dollars annually. It is not always about the price paid for products.

Paul Keckley, the noted hospital strategist, has summarized seven concerns for the hospital C-Suite¹. Among them are two that the supply chain can have a direct impact on.

First is capital deployment. Progressive supply chains should have a voice, and in many cases final approval of contracts for all capital spending, service contracts and supply decisions in concert with the primary stakeholders. If supply chain is not playing an active role in these areas, ask yourself why not. Centralized procurement around an effective purchasing department is key to the controls necessary to ensure that capital is deployed in the most efficient fashion.

The second area is physician relationships. Physician stakeholders need to be active participants in capital, service, and supply decision making. Keckley notes that “Physicians are disgruntled. They believe their interests are not being addressed by hospitals.” Physicians should be a part of the supply chain team, either formally or informally across the organization.

In December 2024, Chartis² did a survey of 61 health system chief strategy officers serving systems with more than $1 billion in annual revenue. Of the seven key findings, three of them can be impacted by effective purchasing and supply chain strategy.

Saving costs (in addition to lower pricing) through value analysis and other means does provide a strategic advantage. It takes a supply chain strategy that when implemented works together with a hospital’s overarching business strategy.

Year over year supply and pharmaceutical price increases continued unabated

The Strata monthly healthcare industry financial benchmarks did not hold good news for non-labor costs through March 2025. Non-labor costs jumped 9.1% from March 2024 to March 2025³.

Strata data is drawn from over 1,600 hospitals and 135,000 physicians.

Is your addiction to rebates and “sharebacks” costing you money?

Getting “extra” is the great American way of expressing value. Ever brag about the great deal you got on a new car (beyond free floor mats)? Everyone loves a good deal – and extra value. It seems like every supplier is already conditioning us for price increases caused by tariffs – that in many cases are not imposed yet.

“Price at the pump” used to be the mantra for many hospital supply chain professionals, but over the past few decades we have been taught by suppliers, our group purchasing organizations and others that sometimes you can get something extra through compliance to contracts and greater volume. In our desire to attain that value, are we sacrificing sound supply chain practices like competitive bidding and meaningful product changes to our desire to gain that “extra”? How much is that extra worth?

• It is great to have “preferred products,” but by sticking with the same old products and not engaging in meaningful product evaluation are we sacrificing the same or better products at a much lower cost?
• Are you spending so-called “share backs” on services that are nice to have – versus needed? Are you using those services?
• Are pricing tiers and rebate schemes so complicated that it is almost impossible to determine the net price? Can you manage and audit the net price? If they are too complicated to manage, then how are you doing “apples-to-apples” comparisons of products and services? Is it time to look at things differently?
• Have you had certain “preferred” suppliers for too long? Nothing gets a supplier’s attention (and a price reduction) faster than making a product conversion.

As hospitals look to reduce expenses, it’s time to put everything on the table, and consider meaningful changes where they are appropriate. Unfortunately, expenses for supplies and services are increasing almost as fast as revenues in many organizations. Total non-labor expenses jumped 9.1% for the year ended March 2025, versus an increase in inpatient revenue of 9.6%.⁴ This is not a recipe for long-term profitable growth.

But achieving it in a positive, productive and respectful way.

By R. Dana Barlow

The White House’s controversial consulting boutique may be generating a lot of blustery headlines and noise of late – maybe not in that particular order – but the chutzpah should motivate the entrepreneurial imagineering within healthcare supply chain about how such a concept could work in provider organizations (minus the punitive pugnacity).

Let’s be honest upfront. Supply chain, more so than the automotive and banking industries, is too big and essential to fail. How? Well, the automotive and banking industries certainly need supply chain to function – including conceptual ideation, designing, production and transportation.

Hospitals and other healthcare organizations are no exception to that rule.

Imagine what would happen if supply chain, resource management, materials management, purchasing or cooperative buying (hearkening back to the halcyon days) didn’t exist? How would healthcare operate “efficiently” during all those decades before Congress made managed care the law of the land in 1983 and shifted fiscal control of an entire industry that now represents about a quarter of the GDP to payers?

The forerunners of today’s contemporary supply chain operations were there to control as many costs and expenses as possible. Granted, back in the day, purchasing served, by and large, as a dumping ground for corporate, family and political patronage appointments, but that was by no means all-consuming and comprehensive. Enough threads of ingenuity and professionalism were woven throughout population pockets that enterprisingly savvy pioneers, leaders and executives emerged and pushed forward.

What many conveniently forget is that as the forerunners of modern healthcare supply chain excellence developed and grew in expertise, influence, knowledge and prestige, the industry around them expanded exponentially like waves in a pond once the pebble hits the water. The more efficient supply chain became, the broader and deeper the challenges they faced around them.

Without supply chain’s contributions, efforts and expertise, how would products, equipment and services be in place for clinicians and administrators to use to treat patients and preserve population health?

Certainly, hospitals and other healthcare facilities would not be empty husks of real estate, devoid of the necessary analog and digital clutter we see today. That means someone would have to bring all of that material in somehow. Who would that be? Administrators? Clerks? Clinicians? Volunteers? All of them?

Without any education, mentoring, training or even common sense, how would these individuals know what to acquire for what price in acceptable or adequate quantity and during what time frames where?

Clinicians are specialists in their respective fields. Doctors, nurses, surgeons and technologists endure considerable education and training to focus on their singular mission – providing care for organic beings that don’t respond like inorganic products on an assembly line. Each patient reacts uniquely to whatever diagnosis and prescription such that clinicians continually must pivot in everything they do. Why does this matter?

Clinicians simply don’t have the time to devote to anything outside of their core mission – or at least they don’t want to sacrifice that time with their patients.

The products, equipment and services they need simply must be there ready to go.

Without supply chain expertise, they likely would not have the discipline nor the understanding on how to source, negotiate and contract for what they needed to carry out their mission so they likely would overpay, acquire too much, driving up costs and expenses to the point of fiscal crisis.

Thankfully, supply chain is, has been and will be there to help not only clinicians to fulfill their missions but also to enable the institutions within which they work to remain open and operate as efficiently as possible.

Fun with acronyms

On paper at least, the federal Department of Government Efficiency (DOGE) was conceived and designed to uncover and root out fiscal and operational corruption, malfeasance, mismanagement, negligence, politico-social engineering and waste or any outcomes a “Department of Redundancy Department” might develop. Media reports and public perceptions give DOGE antics mixed reviews.

Arguably, the theory and baseline intentions behind DOGE may have been admirable even though its output remains controversial, but a dedicated team of “efficiency-minded” professionals has assisted, operated and worked within healthcare organizations for decades. With proper motivation, training and respect, supply chain can continue for decades to come.

Depending on how you slice and dice the numbers, supply chain oversees the largest expense stream in a healthcare organization, specifically if you include outsourced labor as a purchased service, removed from labor’s bucket of managing staff with benefits. For the larger urban organizations at least that maintain expansive reaches to suburbs, exurbs and rural areas, supply chain logically should edge out labor by a nose.

And this is just the beginning.

As recorded, reported and explored in trade media outlets and professional association conferences and media, supply chain isn’t just acquiring stuff for clinicians and administrators anymore. Look at all the categorical functions and responsibilities linked to supply chain today.

The expanse can include asset management, equipment planning, environmental services, facilities management, hospitality, mailroom, print shop, project management, real estate (including groundskeeping and landscaping!) and value analysis with tentacles extended to information systems/technology among others.

To borrow phrasing from those old Oldsmobile television commercials: This is not your father’s supply chain.

This concept, this function, this service deserves a boost, a level-up both earned and deserved.

The acronym for the Department of Supply Efficiency (DOSE) may ruffle feathers in pharmacy even though “supply” refers to the act of supplying and not the products themselves.

Similarly, the acronym for the Department of Healthcare Commerce (DOHC) may cause confusion in online searches by car buffs looking for details on dual overhead cam engines.

Perhaps the Department of Commerce Services (DOCS) satisfies as the acronym and points to a key customer base. The term “commerce” makes sense by mere definition – the exchange of goods and services between two or more entities. The term “commercial” merely represents the activities of commerce. Shared and/or support services may be too compartmentalized and marginalized for this department’s contributions to the top and bottom lines.

Overseen by a Chief Commerce Officer, DOCS can provide business consulting, facilitation and fulfillment to administrative and clinical operations. This spans expense management and revenue generation, helping the organization control costs through traditional supply chain activities and assist in conceiving, designing and planning for clinical service expansions by location, market segment and specialty.

Rest assured, DOCS and its commerce team wouldn’t be telling clinicians how to practice medicine; instead, they would listen to what the clinicians want to achieve – the endgame, if you will – and then work with them to reach their desired outcome as efficiently and quality-driven as possible. Patient care may be classified as a service, but it also can represent an organic product molded and shaped by educated and informed collaborative decisions, intuition and relationships.

Imagine this forecasting the future of today’s healthcare supply chain … and then connect the dots.

R. Dana Barlow serves as a senior writer and columnist for The Journal of Healthcare Contracting. Barlow has nearly four decades of journalistic experience and has covered healthcare supply chain issues for more than 30 years. He can be reached at rickdanabarlow@wingfootmedia.biz.

Designing a DOGE for healthcare provider organizations – The Journal of Healthcare Contracting

Janette Wider May 5, 2025

According to an April 30 article from financial services firm Morningstar, GE Healthcare Technologies Inc. expects the global tariff war to cost the company approximately $500 million in 2025, with the bulk of the impact—around $375 million—coming from bilateral tariffs between the U.S. and China. “Bilateral China tariffs account for the majority of the impact, about 75%,” said Chief Financial Officer Jay Saccaro. While the first-quarter tariff effect was “very small,” at just $10 million, the company anticipates a steep rise in costs through the rest of the year, with impacts of nearly $100 million in Q2 and around $200 million each in Q3 and Q4. This translates to an estimated $0.85 per share for the year.

The organization reported better-than-expected earnings for the first quarter—$1.01 per share versus a projected $0.91—GE Healthcare cut its full-year earnings outlook due to these anticipated costs. The company now expects adjusted EPS for 2025 to fall between $3.90 and $4.10, down from its earlier forecast of $4.61 to $4.75. Saccaro noted that while the company is not expecting relief through tariff exemptions, a hypothetical reduction in tariff rates could improve EPS by about $0.40, although he emphasized, “I’m not suggesting that’s a likely scenario.”

Looking ahead, GE Healthcare is planning several mitigation strategies to reduce the financial burden of tariffs in 2026. These include moving more manufacturing closer to where products are sold and diversifying its supplier base. “The mitigations that we’re putting in place start to rapidly impact [costs] as it draws down over the course of the rest of the year,” said Saccaro, noting that the first quarter of 2026 will still carry a similar impact to the end of 2025.

The broader healthcare and pharma sectors are also feeling the squeeze. Merck recently projected $200 million in tariff-related costs for 2025, while Johnson & Johnson warned of a $400 million hit. Other GE spin-offs are similarly affected: GE Vernova expects up to $400 million in tariff costs, and GE Aerospace projects $500 million, although both companies’ stocks have shown resilience this year

HPN Online

By Angus Liu  May 6, 2025 10:18am

In President Donald Trump’s latest push to bring pharmaceutical manufacturing to the U.S., a new executive order tasks the FDA with reducing regulatory hurdles for domestic producers while making life harder for foreign manufacturers.

The new executive order, signed on Monday, asks the FDA to “reduce the amount of time it takes to approve domestic pharmaceutical manufacturing plants.”

In the meantime, the order directs the FDA to “increase fees for and inspections of foreign manufacturing plants.”

The order lacks details or specific goals, and it’s not entirely clear whether the mandate applies to every FDA inspection or only new facilities, production lines or products. Federal agencies are responsible for designing specific rules following the direction of an executive order.

To benefit domestic manufacturers, Trump is asking the FDA to eliminate “duplicative and unnecessary requirements,” to streamline reviews and to “provide early support before facilities come online.”

New FDA Commissioner Marty Makary, M.D., appears on board with the order and is prepared to act on it.

“We have had this crazy system in the United States where American pharma manufacturers in the United States are put through the wringers with inspections, and the foreign sites get off easy with scheduled visits, while we have surprise visits in the United States,” Makary said during the signing of the executive order at the White House.

Instead, Makary said the FDA will “switch” from announced to surprise visits for overseas drug facility inspections.

Still, the question remains whether the agency has enough resources to conduct those foreign inspections. The FDA has been struggling with a major inspection backlog, especially in foreign countries, since the pandemic. An Associated Press analysis last year found that 160 pharmaceutical plants in India and 185 factories in China were past due for inspection.

Meanwhile, recent mass layoffs at the FDA have affected the agency’s Office of Inspections and Investigations. Even though inspectors themselves were spared, the loss of administrative staff has raised concerns about further delays and disruptions to inspections.

Makary suggested that the FDA will reduce the length of future inspections.

“We’re also not going to have our inspectors hanging out for three to four weeks,” Makary said. “So we’re gonna get in and out, and we’re gonna do more inspections with the same resources as a result.”

Besides the FDA, the Environmental Protection Agency was ordered to accelerate the construction of facilities for the manufacturing of prescription drugs, active pharmaceutical ingredients and other necessary raw materials.

With support from the White House, a single point of contact among federal agencies will coordinate permit applications for domestic pharma manufacturing facilities “to ensure an efficient and coordinated process,” according to the order.

Building new manufacturing capacity for pharmaceuticals and critical inputs can take as long as five to 10 years, “which is unacceptable from a national-security standpoint,” the order reads.

“We don’t want to be buying our pharmaceuticals from other countries because if we’re in a war, we’re in a problem, we want to be able to make our own,” Trump said in a statement Monday.

The executive order adds on to Trump’s planned tariffs on pharmaceuticals in his overall strategy to onshore production of medicines. At the White House event, Trump told reporters that he will announce pharmaceutical-specific tariffs in the next two weeks.

The Trump administration recently launched what’s known as a Section 232 investigation to examine the national security implications of pharmaceutical imports. Findings from the probe could pave the way for potential tariffs.

Pointing to Trump’s remarks during an April 30 rally, Jefferies analysts noted that pharmaceutical tariffs might be implemented gradually, a mechanism that the pharma industry has been seeking.

“We’re gonna be getting tremendous amounts of drug and pharmaceutical companies pouring into the country […] And we’re going to give them time to do it. After that, there’s going to be a tariff wall put up,” Trump said, as quoted by Jefferies.

“But they’ll be happy about it if they start building right now,” Trump continued. “And after a certain amount of time, it’s gonna get tougher, tougher, tougher.”

Trump tasks FDA in exec order to boost US drug manufacturing

Texas and New Mexico see surge in measles cases, with vaccination exemptions rising. Universities issue warnings after potential exposure to measles.

Janette Wider

According to a Feb. 22 article from The New York Times, outbreaks of measles in parts of Texas and New Mexico have increased according to state health officials.

We reported on this outbreak earlier in February.

The article stated, “An outbreak has been spreading through the South Plains region of Texas since late January, the Texas Department of State Health Services said on Friday. Measles vaccination rates in the region lag significantly below federal targets.

“On Friday, the department confirmed 90 cases of measles, with at least 77 of them being children. Sixteen people have been hospitalized, the department said.”

According to an article from BBC, “Health officials in Texas say their figures are likely to be an underestimate, as some parents may not report infections or may not realize their child has the disease.”

Further, the article said, “In Texas, federal data shows that the state achieved a 94.3% vaccination rate among kindergarteners for the 2023-2024 school year, while New Mexico reached 95%.

“But a state survey of Texas schools found that rates of exemptions were ticking upwards for MMR and other required vaccines.

“In Gaines County, where 57 of the Texas cases were reported, exemptions have surged over the last decade. State data shows 17.62% of students had a conscientious exemption to at least one required vaccine during the 2023-2024 school year, up from 7.45% in the 2013-2014 year.”

The neighboring county, Terry, which has 20 cases, saw exemption rates rise from zero to 3.73% over the same period of time.

Texas officials, according to BBC, reported that of the 90 cases in their state, 85 were in people who are unvaccinated or whose vaccination status was unclear.

A Feb. 23 article from CBS News reported that two Texas universities—Texas State and the University of Texas at San Antonio—and their surrounding communities have issued warnings about potential exposure to measles after giving campus tours.

The article stated, “The Hays County Health Department said a Gaines County resident visited San Marcos, where Texas State is located, on Feb. 14. That individual has since tested positive for measles.

“The agency said those who were on the Texas State campus between approximately 3 p.m. and 7 p.m. and/or at Twin Peaks Restaurant from 6 p.m. to 10 p.m. on Feb. 14 may be at risk of developing measles.

“The following day, Feb. 15, a Gaines County resident who has since tested positive for measles, toured the University of Texas at San Antonio.”

Tariffs have emerged as a pivotal element in U.S. trade policy. While tariffs aim to protect strategically vital industries and act as a negotiating tool in trade disputes, their impact on healthcare providers has become an area of growing concern. Rising costs attributed to tariffs on medical supplies, equipment, and pharmaceuticals could jeopardize the financial stability of healthcare systems and limit access to critical care for patients.

HIDA is actively monitoring developments in trade policy and educating elected officials on the ways in which tariffs impact the medical supply chain. Tariff Policy Clearinghouse has the latest developments on trade policy. You can access this resource on our website at www.hida.org/tariffs.

Healthcare providers in the United States operate within a tightly regulated, resource-constrained environment. Tariffs on imported medical equipment and pharmaceuticals could lead to price disruptions across the supply chain. A report by the American Hospital Association (AHA) has underscored these challenges, stating that “rising costs tied to tariffs on medical goods risk eroding access to necessary supplies and compromising patient care outcomes.” The AHA emphasizes the need for policymakers to balance trade policy with the essential public service mission of healthcare providers.

The Trump Administration’s Trade Policy Team

President Donald Trump’s trade team has signaled a commitment to advancing a tariff-centered agenda. Each member brings a unique perspective and potential influence on how healthcare providers will navigate the new trade landscape:

• Treasury Secretary Scott Bessent: Bessent has advocated for using tariffs not only as revenue tools, but also as leverage in international negotiations. His emphasis on fiscal discipline – including spending cuts and tax shifts – may influence broader policy decisions that indirectly impact healthcare funding.
• Commerce Secretary Howard Lutnick: Lutnick has endorsed tariffs as a means to “protect the American worker” – aligning himself with President Trump’s philosophy that prioritizes domestic manufacturing. His leadership in driving the Office of the U.S. Trade Representative’s agenda suggests an aggressive approach to applying tariffs on goods that could include healthcare-related products.
• U.S. Trade Representative Jamieson Greer: Greer has been an outspoken advocate of using tariffs to address trade imbalances, particularly with China. His recent support of tariffs on medical products exemplifies the potential impact on healthcare providers.
• Senior Counselor for Trade and Manufacturing Peter Navarro: Known for his pivotal role in shaping U.S. trade policy during Trump’s first administration, Navarro remains committed to bolstering American manufacturing through tariffs. His influence ensures that healthcare providers will likely remain a focus area as medical products are vital components of U.S.-China trade tensions.

As the Trump administration’s trade policy evolves, healthcare providers and policymakers alike must engage in collaborative discussions to ensure the stability of the healthcare sector and preserve the health of the American public. In an era where trade policy and healthcare intersect, prioritizing patient outcomes must remain paramount.

Impact of Tariffs on Healthcare: Meet the Trump Trade Team – The Journal of Healthcare Contracting

Jan. 31, 2025

Baxter has successfully restarted all 10 manufacturing lines post-hurricane, with production expected to reach pre-hurricane levels early in 2025.

According to a Jan. 28 update from Baxter, the organization has now restarted all of the site’s 10 manufacturing lines.

The announcement said, “While some lines require additional time to ramp up production, we currently expect to be producing at pre-hurricane levels across the plant early in the first quarter of 2025.”

Baxter attributes this success to the resilience of its teams and coordinating with the FDA.

Hurricane Helene Updates | Baxter

Certain lots of Fluid Delivery Sets with Drip Chamber within Medline custom kits should be removed from use due to a potential high-risk issue.

Janette Wider

January 3, 2025

On Dec. 30, the FDA posted an announcement that it is aware that Medline has issued a letter to affected healthcare providers recommending certain lots of Fluid Delivery Sets with Drip Chamber within Medline custom kits be removed from use related to a potentially high-risk device issue.

The announcement said, “On December 16, 2024, Medline sent all affected customers a Medical Device Recall letter recommending the following actions:

• Immediately check your stock for the affected item number and the affected lot numbers listed above.
• Confirm whether you received product with the incorrect white macro drip chamber. Fluid Delivery Sets with white macro drip chambers should be discarded. The image below shows the difference in drip chamber colors and should help in identifying impacted devices.
• If you have received the correct Fluid Delivery Set with a grey micro drip chamber, the product can be safely used.
• Check this web page for updates. The FDA is currently collecting information about this potentially high-risk device issue and will keep the public informed as significant new information becomes available.”

According to the FDA, the reason for the early alert is Medline’s identification of Fluid Delivery Sets that were not assembled correctly with a white macro dip chamber vs. the required gray micro drip chamber.

“The macro drip chamber delivers three times more fluid per drop than the micro drip chamber,” the announcement added. “As a result, using a Fluid Delivery Set with this incorrect component increases the risk of over-administration of fluids, which may result in swelling (edema), shortness of breath, increased blood pressure, and/or death.”

Medline has not reported any injuries associated with this issue.

These fluid delivery sets with drip chambers are provided as components convenience kits. Fluid delivery sets prevent air from entering into the IV tubing and regulate the solution’s flow rate.

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