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January 03, 2015 12:00 AM

Outlook 2015: Supply chain

Jaimy Lee
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    Hospitals in 2015 will continue to search for ways to cut the costs of medical supplies and other nonlabor expenses while developing better methods to measure the value of clinical products.

    “People are increasingly asking the question: Should we be using this (product), and how should we be using it?” said Dr. Bede Broome, an associate principal for McKinsey & Co.

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    The increasingly sophisticated hospital supply chain has been one factor leading medical-device makers to move forward with billion-dollar deals as they seek to become one-stop shops for hospitals.

    With insurers' payment rates declining and fewer inpatient admissions, providers have been under pressure to lower the costs of supplies and services. So they have standardized products, contracted directly with manufacturers and developed more efficient medical utilization patterns. But more opportunities remain to cut costs. “There is still a lot of low-hanging fruit,” said Brent Johnson, chief purchasing officer at Intermountain Healthcare in Salt Lake City.

    Experts say hospitals and manufacturers will continue to develop new types of partnerships. Start-up companies that have struggled to gain ground in a traditionally slow-to-change sector will be more successful as hospitals become more willing to invest in new types of supply chain technologies and services, Broome said.

    Hospital supply chains are becoming more willing to invest in workflow management or product tracking technologies, which could create opportunities for companies developing innovative services and tools.

    With hospitals pushing back against suppliers' prices, manufacturers have seen smaller margins, so they're looking to partner with hospitals through mechanisms such as financial risk-sharing deals in which devicemakers take on performance-based risk for their products. Some hospitals are hiring their own operating room technical assistance staff rather than relying on manufacturer's reps, building their supply-chain teams, and adding data and analytics services. Also, some of the largest hospital suppliers began to merge in 2014.

    Follow Jaimy Lee on Twitter: @MHjlee

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          • - Luminaries
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        • Women in Healthcare
          • - Luminaries
          • - Top 25 Women Leaders
          • - Women to Watch
      • Conferences
        • Digital Health Transformation Summit
        • ESG: The Implementation Imperative Summit
        • Leadership Symposium
        • Social Determinants of Health Symposium
        • Women Leaders in Healthcare Conference
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Diversity Leaders Gala
        • Top 25 Women Leaders Gala
      • Virtual Briefings
        • - Hospital of the Future
        • - Value Based Care
        • - Hospital at Home
        • - Workplace of the Future
        • - Digital Health
        • - Future of Staffing
        • - Hospital of the Future (Fall)
      • Webinars
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      • Podcast - Beyond the Byline
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