This is part two of our two-part series, Optimize Your Supply Chain.
While healthcare leaders have known the importance of a well-managed supply chain before, the COVID-19 pandemic has demonstrated how truly critical it is to hospital stability and growth—both in crises and in normal day-to-day operations. In part one of this series, we shared recommendations and considerations for supply chain management during COVID-19 from reputable sources like the CDC, Harvard Business Review, Wexner Medical Center, MedCity News and more.
In part two below, we zoom out and discuss how lessons learned from the pandemic and other proven best practices can help healthcare leaders successfully navigate supply chain optimization during more “normal” operations.
Supply Chain Management Amid Normal Operations
In time, COVID-19 will hopefully become an event of the past—but that doesn’t mean we should toss away the lessons it taught us—specifically in regard to supply chain management.
An article in Managed Healthcare Executive reflects that healthcare supply chain has been decades behind other industries for a long time—and it became incredibly clear during COVID-19. Resource limitations and other priorities regarding cost and quality have pushed supply chain down the focus list for years, but extenuating circumstances like COVID-19 demonstrate supply chain management cannot be deprioritized any longer. The article reads:
That means moving quickly to automate supply chain management, implement AI-based analytics that account for disruption scenarios, and incorporate demand forecasting technologies.
They must also update and revise their supply chain management disruption contingency plans, as the models they had in place prior to COVID-19 were no match for an event of this scale and duration. Finally, they must create plans for secondary and tertiary resources, and begin developing coalitions with other hospitals to pool resources when necessary.
Introducing Better Technology and Reporting Systems
As noted in the quote, one of the critical pieces of a well-run supply chain is taking advantage of widely available technology and automation tools. HIT Consultant notes that real-time supply chain management systems with timely, accurate reports are absolutely essential—and it will be easier, more efficient, and more cost-effective to react to crises if those systems are already in place.
Excellent data and reporting gained as a result of improved technology systems will also help remove subjectivity and variation from the supply chain process. RevCycle Intelligence reports a 2007 survey showed physician preference accounting for up to 61% of healthcare supply spending. Standardizing preference items and reducing variation can significantly reduce both cost and waste within the supply chain. And, as Becker’s Hospital Review notes, “without standardization you can’t begin tracking metrics…[and] it’s very difficult to use automation.” Start with a few manageable areas, then expand as you gain success and confidence in reviewing, evaluating, standardizing, and tracking.
Finding the Right Partners
Another article in Becker’s Hospital Review points out supply chain technology in healthcare has to be extremely dynamic and adaptive while also providing rigor and automation. Even in more ‘normal’ circumstances, the healthcare landscape changes rapidly, and the technology must be able to adapt to shifting needs. While this might seem straightforward, what may be surprising is the number of touchpoints supply chain technology could affect and improve, including patient access, hospital innovation, price transparency, customer service, telehealth, and more. It is critical that the technologies and solutions chosen help capture the entire supply chain picture and consolidate all the relevant information and important data in one, unified place.
Because supply chain management technology is such a significant and important investment, it is essential that hospitals seriously evaluate and test the systems they are considering using prior to signing any long-term contracts. Wexner Medical Center suggests the same approach applies to vendors within the actual supply chain; organizations must have a strict criteria list to effectively and efficiently vet prospective partners. RevCycle Management adds that being able to trust partners within the supply chain and have visibility into all types of costs (both obvious and more hidden) is imperative for an optimized supply chain to improve hospital financial health as well as provider and patient satisfaction.
One way to ensure the right criteria are used and the right partners are selected is to establish an interdisciplinary partnership between clinicians and supply chain leaders, says Healthcare Finance News. We noted earlier that clinicians often bring budget-busting preferences to the table when it comes to devices and other supplies, but this doesn’t mean they shouldn’t be involved in decision-making. Setting up formal governance and infrastructure, regular meetings, and comprehensive data demonstrations will help everyone get on the same page about supplies and spending. If executed well, this cohesion can significantly and positively impact total cost of care.
Though the COVID-19 pandemic has had innumerable negative effects, there is a glimmer of silver lining in the lessons it has taught the healthcare system about how to adapt and improve moving forward. For many healthcare leaders, this time has served to clarify needs and priorities, notably showing supply chain management is an extremely important component of a reputable, financially stable healthcare organization.
If you’re looking for an experienced new partner to help support your operations, we’d love to explore how SCP Health can help. Contact us today to start the conversation.