More on Supply Chain

Hospital bottom lines could benefit from more clinical integration in the supply chain

A tiny fraction of healthcare executives, 5%, said clinical integration is their supply chain't top priority.

Jeff Lagasse, Associate Editor

If a hospital supply chain is to operate at the highest level, and have a positive impact on a health system's finances, clinical integration is paramount.

That's the main takeaway of two new surveys, which indicate a possible discrepancy between hospital executives' high-level view of the importance of clinical integration to supply chain and financial performance, and the effectiveness of the actual on-the-ground approaches taking place in many health systems.

Nexera and Acurity conducted two separate surveys to determine hospital executives' understanding of supply chain, related pain points, and strategies for clinical integration, sustainable cost reduction, and operational efficiencies. Nexera is a national healthcare consulting firm with roots in supply chain and performance improvement, and Acurity is an organization of healthcare professionals who help providers deliver better care and reduce operating expenses through enhanced supply chain performance.

Regarding clinical integration, 66% polled said that they currently tie clinically integrated initiatives to the budget. But only 5% of executives indicated clinical integration as their supply chain's current priority.

Perhaps most notably, when asked if clinicians are involved in formalized supply chain utilization and procurement decisions, the majority of senior and financial management professionals said yes, while the majority of clinical, operations and materials professionals -- all of whom are central to this effort -- said no.


These discrepancies beg the question of whether the majority of health systems have a unified cost management strategy -- with clear and accepted expectations -- and if high-level goals are actually being conveyed to the front lines.

Seventy-three percent of hospital administrators said supply chain is tied to their cost management strategy. Fifty-three percent of those respondents answered that their institution has performed a coordinated supply chain assessment in the last two years, with 78% of those responding that it met their objectives for cost reduction and operational improvement.

Yet many of the same respondents then pinpointed cost reduction as their supply chain's biggest priority, as well as the area that could use the most improvement -- suggesting that the current strategies being employed have not been sustainable.

While nearly all respondents agreed that supply management plays a significant role in good margin control and the ability to establish a sustainable financial model in a patient-centered, highly reliable environment, other answers suggest that the current cost management strategies being employed may not be achieving the best results, especially if they do not prioritize a method for involving clinicians.


Price optimization is a common goal for those involved in the healthcare supply chain. In order to maintain an acceptable level of spend and realize savings on medical devices and supplies, it helps to know how much items cost and whether there are less expensive, equally effective items on the market that can be used by clinicians on the front lines. Involving clinicians in the process can help in this regard.

Price optimization is only one piece of the puzzle, though. It's a critical piece, since the fluidity of price points on certain items can be dramatic. But there are other factors supply chain leaders should keep in mind.

Twitter: @JELagasse

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