Many hospitals and health systems are facing a severe revenue crisis due to the drastic decline in patient volume and the postponement of income generating procedures. In response, hospital staff, including supply chain professionals, have been furloughed or laid off as providers desperately work to conserve cash. According to the U.S. Bureau of Labor Statistics, despite some recent gains, healthcare lost 797,000 jobs between February and July 2020.
The last several months have wreaked havoc on budgets, adding pressure on already-taxed administration teams to find new strategies for managing costs without sacrificing the quality of care. As hospitals and health systems prepare for a long recovery, supply chain teams can offer insight that will guide strategic decisions regarding the long-term financial health of the organization.
Embrace the evolving role of supply chain
Unwarranted spending continues to be an issue for the industry. A 2019 annual Guidehouse (formerly Navigant) report shows unnecessary U.S. hospital supply chain spending reached $25.7 billion a year, up 11.8% from 2017. While improving efficiency and strategic sourcing remain important operational functions, the Coronavirus disease (COVID-19) pandemic has demonstrated it’s time to elevate supply chain as a strategic partner in the C-suite. Supply chain professionals have the expertise to help hospitals not only manage costs, but also better respond in times of crisis. Further, the shift to value-based care requires the industry to understand both the costs and clinical outcomes associated with the use of specific products.
Tap into outcomes and cost data
Supply chain has access to product knowledge as well as the clinical and cost data needed to improve this understanding. This uniquely equips them to evaluate products in a concrete and rigorous way to better serve the hospital’s objectives in delivering quality care at a lower cost. Therefore, leveraging supply chain as a strategic partner will help ensure long-term viability during pandemic recovery.
Integrate supply chain and clinical practice
Traditionally, there has been an incorrect perception among clinicians that most supply chain departments prioritize financial value over quality and outcomes. This is often a barrier to a clinically integrated supply chain. To accomplish this, forward-thinking institutions will facilitate more successful partnerships between supply chain and clinicians, where data and information become a bridge to collaboration. Based on this knowledge, clinicians and supply chain professionals can work together to drive improved cost, quality and outcomes for their health systems and patients.
Bracing for the future
By instituting the transparent sharing of data between clinicians, administration and their business partners and elevating supply chain as organizational leaders, healthcare providers will improve operations and enable higher quality and more effective care. Organizations that have done this will become more resilient and agile. COVID-19 has proven this is what it takes to thrive in the months and years ahead and be better equipped to tackle future crises.