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Hand stacking wooden blocks labeled with Clinical Supply Chain related images

It’s an interesting time in the healthcare industry, and for the supply chain specifically. Each of the following market factors is thrusting the supply chain to center stage and calling on all of us to up our game in the face of more complex operations. These factors include:

 

  • The advancement of new technology, from drones and robots to artificial intelligence and distributed ledgers
  • Increasing margin pressure
  • New and changing traceability regulations
  • Numerous mergers and acquisitions


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The recent Becker’s Hospital Review Annual meeting in Chicago was invigorating and thought-provoking, with many presentations from CEOs of many leading healthcare systems. I wanted to share an overview of three breakout sessions that spoke specifically to Healthcare Supply Chain.

 

Can’t Deliver Care Without Stuff: Emerging Strategies for Supply Chain Management was a discussion with Brent Johnson, VP Supply Chain and Chief Procurement Officer at Intermountain Healthcare in Salt Lake City, UT. Brent comes from outside the healthcare industry. When he came into healthcare supply chain at Intermountain he was shocked at how, as an industry, healthcare managed its supply chain so casually, because “you know, outside healthcare, supply chain is seen as STRATEGIC to the organizational performance.”


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Isn’t this the most interesting time in US healthcare? Actually, in healthcare across the globe? Because no matter how your healthcare system is funded, the containment and management of supply chain costs is a constant business reality we are all facing. To that end, supply chain is finally coming into its own in the C-Suite of most organizations. We are realizing, as an industry, that what has worked in the past will no longer work in our emerging reality — on all sides of the business equation. Everyone has to participate in the change.


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I would like to share some reading I have been doing that is providing a lot of food for thought.

 

The first source is the book “Healthcare Will Not Reform Itself” by George Halvorson, CEO of Kaiser Permanente. What a compelling read! Mr. Halvorson walks us through many scenarios, while breaking things down to accessible portions. One (of the many) premises that provoke pondering is around the misalignment of financial goals in our healthcare (non)system. As it is structured today, it does not support reform as we generally talk about it. If the focus is to decrease costs by promoting healthier lifestyles or preventive programs, a projected result would be decreased admissions to acute care facilities. However, this approach would, very likely, drain revenue to the IDNs…which diminishes the ability of the IDN to serve the community or even survive. An incredibly complex conundrum. This challenge reinforces the focus on tight operational expense control, of which supply chain is a significant factor. But overall it emphasizes the ongoing need for innovative thought and change management.


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