How healthcare leaders can spend less time on procurement and more time on care

By | November 27, 2018

The following is a guest post from Chris Holt, leader of global healthcare at Amazon Business.

Technology is rapidly changing the healthcare industry: surgeries are microscopic, patients have virtual appointments, doctors offer 3D visualizations on medical scans and more. But while these advancements in patient care are happening on the front lines, there seems to be a gridlock in the healthcare supply chain industry behind the scenes. Hours are wasted each day on ordering supplies and inventory is not always in stock, which leads to delayed procedures, higher costs, and ultimately, a negative impact on patients.

Imagine the scenario: on one side of the hospital, doctors perform surgeries with robots, while on the other side — either the loading dock or a supply room  procurement teams manually check spreadsheets to ensure their inventory is in stock. As budgets get smaller and executives face more pressure to bring costs down, the need to reduce both the time and money spent on outdated inventory management processes is more pressing than ever.

And while change can be complicated, there is no denying that there are a number of ways healthcare leaders — whether at a hospital or doctor’s office  can spend less time on procurement and more time on care.

The challenges of outdated IT infrastructure

According to a 2017 Health Sector Supply Chain Research Consortium report, 94% of healthcare providers “cited the use of analytics as an area of focus in supply chain.” And yet, access to data can be a real challenge in the healthcare procurement industry.

In many cases, poor IT infrastructure put in place decades ago has caused mismatched data standards and a lack of interoperability. The typical hospital system still uses a manually curated item master to keep track of everything they have procured or are approved to purchase. These outdated and manual healthcare supply chain management processes detract from care delivery.

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In fact, several studies over the past decade continue to cite that clinicians are spending up to a quarter of their day seeking supplies or the appropriate clinical equipment for their patients. These hours add up and put a further strain on workforce morale and clinical outcomes.

Today’s online stores offer the ability to shift costly, labor-intensive approval processes to a more simple review and approval approach. Once an admin goes into the online system and sets parameters for what can (and can’t) be purchased, it makes it much easier for organizations to delegate purchasing power to specific employees  or the entire workforce. One rural hospital in Washington saw its labor expenses decrease by over 80% and was able to renew it focus on patients as a result of bringing purchasing online.

Disorganized and wasteful time spend

Another issue plaguing healthcare professionals is tail spend. For most healthcare organizations, a significant amount of money is spent on non-strategic or unmanaged supplies every year. This tail spend can be costly and time-consuming, as it requires managing hundreds or even thousands of different suppliers.

By bringing procurement online, healthcare leaders have more freedom to look at their spend in a much more straightforward, transparent way. With the right spend analytics, healthcare organizations can make more informed choices about products and suppliers while limiting rogue, unmanaged spend.

Finally, if healthcare professionals really want to stop spending as much time on procurement, they need to ensure their processes are easy-to-use and palatable for the next generation.

For example, the healthcare industry has seen the rise of professionals and clinicians who I like to call “Mallory the Millennial” — she is the new consumer to healthcare and employee for healthcare companies. She’s up to date on the latest trends and technology, but when she comes to work, she has to put her smartphone down and log into traditional procurement platforms that don’t give her the same value or efficiency she’s used to. If she can’t find a product on the traditional portal, she’s willing to find it somewhere else to make a business purchase because it’s a seamless experience. Adopting easy-to-use, online tools and an efficient supply chain system can not only alleviate the frustrations that come along with ensuring supplies are fully stocked, but also improve future recruiting and retention efforts.

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Just because healthcare procurement systems have been around for decades doesn’t mean they are the best (or only) solution available. Leaders should recognize the need to embody the change they want to see within the industry, take the plunge to be bold, and experiment with different procurement offerings.

While adding these new technologies might be an investment up front, they can make a serious impact on healthcare organizations’ bottom lines while also driving efficiency. What’s most important is the ability to return focus to what really matters: patient care.

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