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Inside the Supply Chain

Supply Chain Will Play Increasingly Significant Role

Lori Weaver - Tuesday, June 14, 2011

As healthcare faces its most uncertain direction since the advent of Medicare in the 1960s, introspection is in order on those of us in the supply chain segment of healthcare delivery.

While no one is entirely certain of the precise impact healthcare reform will have in the coming years, it is with great certainty that we cannot continue down a path of unbridled cost increases. Taking into account the increasing percentage healthcare costs consume of our individual/personal dollars year after year, along with the increasing percentage healthcare costs consume of our public expenditures year after year, this trajectory is unsustainable.

Comparing our health care costs globally to every other advanced economic country in the world evinces a stark realization: we are THE MOST COSTLY and thus have a considerable length to go just to align our costs with countries with similar (and in many cases better) patient outcomes.

For that reason, we supply chain professionals will be playing an increasingly significant role in the coming years as we embark upon whatever version of health care reform ultimately transpires (and despite the outcome of court challenges, reform will ensue). In fact, we may be entering a “golden era” for supply chain professionals, as never will we see an opportunity such as now to bring sound contracting, logistic, and general supply chain principles forward.

While in the past, the economics, and in some cases the politics, of the  entire healthcare system allowed many to only moderately challenge (in some cases completely ignore)  stasis with product selection/standardization and delivery (particularly PPI and other individual taboos); with the new imperative,  this will no longer be possible for survival. Thus, the work of the materials professional will become ever increasingly consequential to the entire reform effort. The daunting challenge to reform health care and reduce costs will provide well-prepared supply chain executives unparalleled relevance and importance.

Thomas Golaszewski is vice president, resource and materials management, Meridian Health.

Comments
Rosalind Parkinson commented on 21-Jun-2011 08:50 AM
This important article must be shared with executives of large IDNs. Too often Supply Chain is still viewed as a necessary "cost" of doing business for hospitals. The best a supply chain leader could do was to work hard (with variable executive support)
to contain those costs. The future Tom outlines above must include a change in the understanding of supply chain so that its value moves into mainstream strategic planning for clincial commitments and revenue enhancement. EHR integration must include supply
data as soon as possible.

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