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Survey: Supply-Chain Effectiveness Is High Priority for Hospital Decision Makers

Institutions work to reduce waste and related costs

Reimbursement is the biggest problem facing health systems today, followed closely by the increasingly high cost of supplies, according to a new survey of hospital executives commissioned by Cardinal Health. Financial issues, drug shortages, and the efficiency of the organization followed as the next major concerns.

The survey, conducted by health care data provider SERMO Intelligence, queried 150 hospital decision makers on supply-chain issues. The results showed that most of the respondents were taking some action to improve their supply chains, agreeing that it will reduce costs. However, few hospital decision makers were confident in their supply chains’ overall effectiveness.

Only one-third of hospital decision makers rated the management of their hospitals’ overall supply chains as “very effective,” according to the survey. However, two-thirds “strongly agreed” that improving the effectiveness of their supply chains would reduce overall costs, increase revenue, and lead to better quality of care. Eighty-five percent of the respondents said that their health systems were currently working to identify or implement new ways to reduce supply-chain waste and related costs.

Reducing costs is an urgent goal as hospitals shift to value-based health care, according to Cardinal Health. The supply chain and the products it moves is the second largest expense for health care providers. At an aggregated level, an estimated $5 billion of annual waste occurs in high-value medical devices alone.

The current approach to supply-chain management at most hospitals requires intensive staffing to handle multiple, often redundant systems that lack the data-sharing and transparency needed to prevent waste.

The survey showed that the primary obstacles to improving supply-chain management include the lack of a full view of the supply chain from manufacturer to patient, and low awareness of current technology, such as automated solutions that use radio frequency identification (RFID) tags. In the survey, only 15% of hospital decision makers “strongly agreed” that they have a sufficiently broad view of their supply chain.

The survey also showed that a discrepancy exists among supply-chain leaders and C-suite executives with regard to the supply chain’s role in reducing overall costs.

The survey was conducted online from March 26 to April 13, 2015. The study included a total of 150 medical professionals in the U.S., including subsamples of qualified and screened supply chain decision-makers (n = 88) and hospital executives (n = 62).

Source: Cardinal Health; December 14, 2015.

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