Exploring the Supply Chain Management in Healthcare

Healthcare supply chain management keeps the regulation flow of medical goods and services from the manufacturer to the patients. Cutting down on healthcare costs has become imperative for physician practices, hospitals especially those places which start to tie to claim reimbursements.

Whether it is a hospital, pharmaceutical manufacturer, drug distributor, or retailer, every link in the chain could better manage their inventory, or work more closely with suppliers. The opportunity for growth is so great, that the third-party providers are investing heavily in the sector, with specialized services tailored to a growing healthcare logistics market.

As rising expenses threaten the viability of traditional healthcare distribution methods, read more on how hospitals seek to maintain patient care while spending less on their supply chain management.

What Role Supply Chain Management in Healthcare

Providers use a myriad of items, such as syringes, prescription drugs, gloves, pens, papers, and computers. Employees involved in healthcare supply chain management are responsible for stocking organizations with the products providers need and managing inventory.

However, managing the supply chain is not as simple as making sure providers have enough supplies. The healthcare supply chain starts at the medical product manufacturer where items are produced and sent to a distribution center. Depending on the type of product, hospitals can either purchase inventory directly through the manufacturer or distributor, or the transaction can be conducted through a group purchasing organization, which establishes a purchasing contract with the manufacturer on behalf of the hospital.

Medical products are then sent to the healthcare organization, where the goods are stocked into inventory for providers and patients. The organization ensures that providers are not left without essential medical products and patients have access to potentially life-saving tools.

Another aspect of healthcare supply chain management involves the participation of regulatory agencies, such as the Federal Drug Administration, and healthcare payers, including Medicare and private health insurance companies. Regulatory agencies and payers determine if a medical resource is fit for consumer use and whether providers will be reimbursed for using it on specific patients.

Overcome common challenges in healthcare supply chain management

  • By harnessing price and utilization data, healthcare organizations can track and manage inventory more efficiently and construct more informed purchasing contracts with manufacturers.
  • Significantly reducing the waste and variation in the supply chain.
  • Product expiration can be virtually eliminated.
  • Different automated tools can help organizations increase price transparency, such as computerized provider order entry systems, which can standardize and streamline physician orders, or Radio Frequency Identification technology that can capture volumes of data from a product’s barcode.
  • Getting all hospital departments on the same page is also a key strategy for optimizing healthcare supply chain management.
  • Healthcare organizations should focus on reducing redundancies and eliminating waste, but providers also need to work together to effectively reduce costs and boost performance.
  • Engaging clinical staff can also help to establish cost-saving habits, discourage hoarding, and empower providers to keep cost concerns in mind when delivering care.

At the end of the day, the patient-focused supply chain runs like most others. There is a focus on customer service, process improvement, strong relationships, communication, and cost management.