When looking at expenses for hospital systems, supply chain management consistently ranks as one of the most costly. Decreasing profit margins within supply chain is one of the biggest issues facing the healthcare industry. Hospital margins are likely to decrease in 2020, but an effective supply chain system can offset these losses. In terms of supply chain, hospitals have room to save funds. Recognizing this opportunity for financial growth, healthcare administrators rank supply chain cost reductions as a top priority for improving their overall efficiency. This growing want to cut supply chain expenses leads many large hospitals to become their own warehousers and distributors. This also leads to the question of what smaller hospitals will do to cut costs and become more efficient in the supply chain area.

In a survey conducted by Cardinal Health, 18 percent of hospital employees have heard of a patient being harmed due to a lack of necessary supplies. One in four hospital employees reported an expired or recalled product being used on a patient. These issues stem from the lack of a strong supply chain. Furthermore, the survey found that the inefficiency of supply chain led to physicians spending more time during work on supply chain and inventory management rather than spending that time with the patients. Nearly 20 percent of physicians’ time is spent on hospital supply chain tasks, and the reduction of time physicians spend with patients due to the inefficient systems is a drawback many hospitals face.

The main goal of hospital management is to help keep patients healthy and safe. Reducing costs and increasing efficiency of supply chain leads to physicians and nurses having more time to spend with patients and an increase in the quality of care. New technology and cloud-based tools will help improve supply chain efficiency in healthcare. Investing in a healthcare supply chain software can be a cost cutting measure in hospitals due to the increase in efficiency that successful supply chain systems would bring about.

GreenLight Medical is one such tool being used by healthcare providers and industry alike to enable collaboration on new medical technology introduction.

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Resources:

Cardinal Health. (2017). Survey Finds Hospital Staff Report Better Supply Chain Management Leads to Better Quality of Care and Supports  Patient Safety. Retrieved from https://www.multivu.com/players/English/8041151-cardinal-health-hospital-supply-chain-management-survey/

Michigan State University. (1 August 2019) Changes and challenges in the healthcare supply chain. Retrieved          from https://www.michiganstateuniversityonline.com/resources/healthcare-management/changes-and-challenges-in-the-healthcare-supply-chain/

Paavola, A. (1 August 2019). Supply expenses will cost more than labor & 4 other healthcare forecasts for 2020. Becker’s Hospital Review.    Retrieved from https://www.beckershospitalreview.com/supply-chain/supply-expenses-will-cost-more-than-labor-4-other-healthcare-forecasts-for-2020.html

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