What are the top Challenges Faced by the Healthcare Supply Chain?
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- 1 What are the top Challenges Faced by the Healthcare Supply Chain?
From gauze and paper gowns to implantable devices and prescription medicines, provider organizations need to implement efficient processes for managing the healthcare delivery chain to cut total costs and standardize care delivery.
But the healthcare supply chain is not as simple for many organizations as monitoring how items are purchased and where they can go after purchase. A survey carried out by Cardinal Health as well as SERMO Intelligence in December 2015 demonstrated that the supply chain was the second-highest cost for healthcare professionals.
Although only one-third of the 150 healthcare professionals surveyed defined the supply chain process of their organization as “very efficient,” about two-thirds strongly agreed that working to improve the supply chain management for healthcare would reduce costs, boost funds to finance and enhance the quality of patient.
However, several healthcare organizations, facing some obstacles, make their supply chain more effective. Some of the best healthcare supply chain control difficulties involve expensive supplier preference items, lack of access to health IT execution for supply chain processes and limited accountability of costs involved.
Top 8 Challenges The The Healthcare Supply Chain Faces
The supply chain for healthcare is distinctive to the distribution networks of any other industry. Yes, it includes tracking product acquisition as well as its path from origin to destination, and many of those numbers can be a matter of life or death. In addition to this, supply chain management causes a significant expense for healthcare professionals. Indeed, a recent report revealed it to be the second-largest expenditure providers possess.
When prescribed drugs, medical equipment, and other medical equipment fall into an optimized production process, healthcare providers see their costs reduced, their revenues increased, and, most importantly, better patient care. Providers must tackle the most significant challenges to optimize the supply chain.
1. The cost-saving goal of the health care system
Subsidies to build more responsible care-focused capabilities (associated with minimizing funding levels) have provided a good reason for health systems to assess their total cost structure. Health systems determine the cost savings that are needed to both lives and succeed in this environment. And the most significant spending areas are the first cost-reduction victims
While healthcare executives may look to different cost-cutting objectives, Inova Health System in Falls Church, Va., recognized the cost reductions needed to achieve profit margins on Medicare rates and then transmitted portions of that goal to various groups within the organization. Her supply chain management team is responsible for cost savings of $40 million, $28 million of which is saved in a year by:
- Upgrade to GPO
- Join an organizational commitment to cooperative procurement
- Reducing costs for doctor’s preferences
- Other major spending areas and savings made areas, would include staff training and labour efficiency as well as purchased service providers.
2. Process manuals and absence of automation
Management of the supply chain has grown significantly in recent years at least in theory. Technological advances, including blockchain, mechanization of robotic processes, and the internet- of – things open up exciting opportunities, yet they are often missing entirely.
Many providers, for instance, continue to rely on manual activities to handle their inventories. Modern radio frequency identification ( RFID) systems are used by less than 1 in 6 hospitals, so although, according to Cardinal Health findings, just about 80 per cent of them rely solely on manual inventory control.
3. Hidden Expenses
A further challenge faced by health care suppliers is the hidden costs of each product. Traditionally, most suppliers have just begun to look only at the price of the product and the delivery charges. But there are extra costs, for example, holding inventory.
Suppliers need to plan one’s spending plan around the total cost of landed delivery. They have to be aware of failures from the inevitable aspect of defective products and surplus supplies that they will incur. They must look at quality control and the variance in purchase prices.
Here is where software for quality healthcare comes in. Providers can begin to take a more comprehensive approach to price their products, including the costs of moving and managing the supply. This means utilization of the product, specific delivery services, ‘logical, and so much more.
4. Overuse or variance in care
Data can assist in identifying areas where savings possibilities may exist. While there are some variations in care to ensure high-quality results, some differences in the processes or product lines used are unjustified by the client’s condition – that’s what we call unwarranted variation.
One illustration would be the use of blood. Overuse of blood products can take place when patients receive a transplant if they don’t want one, patients who will need one unit rather than two, or blood that is helped bring to the room of a patient and is not used. By looking at data, you can identify those patients who get the blood (or too much blood) with no better results.
Premier, Inc. including the Centers for Disease Control and Prevention ( CDC) has also recently published research indicating overuse in antibiotics – in specific, combos of IV antibiotics – that increase costs but do not improve results. And in some cases, these same risks of resistant bacteria or other safety issues boost.
5. Lack of Inclusion
Health practices, facilities, and healthcare facilities are increasingly being consolidated. Health systems are growing, merging, and making acquisitions. As this occurs, supply chains remain independent in these decided to join yet siloed organizations. This needs to be addressed by health care providers because inaccuracy between these distribution networks will hurt the bottom line.
It is necessary to integrate those supply chains. We need to centralize the buying channels. Installations need to share agreements so they can obtain higher tier pricing. This same supply chain would not be cost-effective without such modifications, and the procedures that it includes will remain ineffective.
Overcoming the Challenges
In reply to these distinctive challenges, future-oriented organizations are raising the critical position of the supply chain — from of the rise of a supply chain to an executive
leadership position with VPs or chief supply chain officers, to the creation of a conceptual supply chain that can help transform patient care into a decent healthcare experience —Complete with concierge, local organic produce but also restaurants and shopping perspectives to make a hospital stay more like a luxury weekend hotel.
Healthcare needs prominent features which are ready to meet these industry challenges today and predict tomorrow’s expectations with the required standards of the supply chain and a vision for both the future.
To overcome these challenges, you could also consider outsourcing your healthcare supply chain processes to our experts at Invensis Technology.