Trends in Health Care
executives’ attention
(Editor's note: This report contains an overview discussion of hospital supply chain trends, including: why the rising bariatric population is forcing changes in purchasing, how hospitals are automating the purchasing cycle to improve efficiency, quality management initiatives to improve efficiency and patient safety, and how information technology is enhancing supply chain operations. To access all of the data tables in this report, simply click on the pdf download link below.)
Materials managers have evolved from “box pushers” to supply chain experts as a means of adapting to an increasingly complex supply chain. No longer are they autonomous in their roles, but instead collaborate with other departments such as facilities management. But with this rise in visibility and has come increased pressure from hospital executives to cut costs.
Historically, many hospital executives haven’t had a full understanding of materials management’s challenges, but that seems to be evolving as well. According to the 2008 Healthcare Executive Survey on Supply Chain Management, both executives and materials management identified clinical performance and outcomes/patient safety as the No. 1 challenge faced by hospitals; and both agreed that the No. 2 challenge was overall operating costs. The purpose of the survey, which was a collaborative effort of AHRMM, Chicago; Owens & Minor, Mechanicsville, Va.; and Marquette University, Milwaukee, was to compare perspectives of those in the C-suite with those of supply chain executives. The supply chain makes up 35 percent to 45 percent of a hospital’s total budget expense. And according to the Centers for Mediciare & Medicaid Services, overall hospital expenditures are going to reach $2.9 trillion by the year 2010, which means hospitals are trimming costs anywhere possible. Materials managers have responded by increasing supply chain efficiency with technology and quality management programs.
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According to the Quality Management in the Hospital Supply Chain Survey, published in the March 2008 issue of Materials Management in Health Care (MMHC), quality management programs have increased in the past two to five years, (e.g., Six Sigma at 62.9 percent and Lean Management at 49.2 percent). And, hospitals are implementing technological solutions to provide interdepartmental communication. According to the 2007 Hospital Supply Chain Technology Survey, published in the July 2007 issue of MMHC, 40.2 percent of hospitals deployed an enterprisewide ERP system. Sixty-nine percent of materials managers agreed that “the supply chain is an area of strategic importance and focus for our organization.”
The industry has recognized that the supply chain, if managed properly, has the potential to positively impact the industry. But it will take cooperation, especially with executives, to make it work.
This article first appeared in the December 2008 issue of Materials Management in Health Care.
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