Exploring the Role of Supply Chain Management in Healthcare

Healthcare supply chain management involves obtaining resources, managing supplies, and delivering goods and services to providers and patients. To complete the process, physical goods and information about medical products and services usually go through a number of independent stakeholders, including manufacturers, insurance companies, hospitals, providers, group purchasing organizations, and several regulatory agencies.

However, by promoting efficiency in the healthcare supply chain, hospitals and physician practices can create substantial cost-reducing opportunities across their organization.

Here is a look at what goes into healthcare supply chain management and how healthcare organizations can overcome major challenges to further reduce spending.

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What is healthcare supply chain management?

Take a moment to think about what providers use every day to treat patients. Providers use a myriad of items, such as syringes, prescriptions drugs, gloves, pens, papers, and computers. Employees involved in healthcare supply chain management are responsible for stocking organizations with the products providers need and managing inventory.
The healthcare supply chain starts at the medical product manufacturer where items are produced and sent to a distribution center. Depending on the type of product, hospitals can either purchase inventory directly through the manufacturer or distributor, or the transaction can be conducted through a group purchasing organization, which establishes a purchasing contract with the manufacturer on behalf of the hospital.

Why is healthcare supply chain management so complex?

Healthcare supply chain management is unique because each stakeholder has their own interests to protect. Different stages in the supply chain flow may be focused on their own goal. Providers may want to use a specific product because they were trained with it, whereas hospital executives aim to purchase the most affordable quality items.

Since supply chain goals are not always aligned within an organization, the healthcare supply chain management process can be inefficient and fragmented. Healthcare organizations must take into account numerous requests and viewpoints to settle on specific product budgets.

Patients also have a voice in the healthcare supply chain management process. Healthcare organizations may be able to regularly order the correct sizes of gloves and keep them stocked, but some patients may need more customized medical products, such as latex-free options, depending on their health status.

The healthcare supply chain management market, based on the component is segmented into hardware and software. The hardware segment is further classified into, systems, barcodes, RFID and others and the software segment is further classified into, supplier management software, transportation software, procurement software and others software. Based on the delivery model, the healthcare supply chain management market is segmented as, on premise, cloud based and web based.

Some of the key players operating in this market place include SAP AG Group, Oracle Corporation, McKesson Corporation, Providence Health & Services, Geisinger Health System, AmerisourceBergen, Intermountain Healthcare, Advocate Health Care and others.

Source: revcycleintelligence