Reap supply chain savings with better contracting, data

To survive in the ever-changing healthcare environment, hospital leaders should eliminate unnecessary costs by embracing supply chain best practices, such as fixing inefficient contracting practices and championing data standards, according to a new white paper from the Health Industry Distributors Association (HIDA) Educational Foundation.

The recommendations stem from in-depth interviews with dozens of healthcare executives from organizations including Detroit Medical Center, ProMedica, Mayo Clinic, University of Pittsburgh Medical Center and Cleveland Clinic.

An improved contracting process needs transparent product and tiered pricing, as well as an electronic contracting model, according to the white paper.

For more efficiency, hospital supply chain leaders must adopt data standards, according to an announcement from HIDA. Moreover, they must turn that data into actionable insights.

Successful supply chain management uses comparative data to guide cost-quality decisions. For instance, analyzing data allowed Banner Health in Arizona to address nonoptimal utilization of abdominal adhesion barriers and save $1.6 million in one year, Healthcare Finance News recently reported.

Other supply chain best practices include linking products and outcomes, and investing in new capabilities to improve care across all settings, such as outpatient and home-based treatment.

 "We are trying to give patients care closer to home--we will  always have inpatient beds, but they will be more concentrated.  We are highly focused on  moving from inpatient to 'retail' " or outpatient, a hospital system's supply chain vice president said in the white paper.

With supplies counting as one of a hospital system's largest expenses, supply chain leaders could reap significant savings by focusing on reducing unnecessary inventory, such as items that haven't been used in more than a year, according to Healthcare Finance News.

These supply chain improvements come as hospitals learned they will bear the burden of the medical-device excise tax for more than 40 medical supply and device manufacturers.

For more:
- here's the announcement
- check out the white paper (.pdf)
- read the Healthcare Finance News article