Practice Management News

Data Analytics Top Healthcare Supply Chain Priority in 2018

Hospitals and health systems are looking to derive insights from data analytics and standardize items to improve healthcare supply chain in 2018, a survey showed.

Healthcare supply chain and data analytics

Source: Thinkstock

By Jacqueline LaPointe

- Harnessing the power of data analytics to inform decision-making continues to be the number one healthcare supply chain outcome provider organizations hope to achieve in 2018, a recent Global Healthcare Exchange (GHX) survey found.

The survey of provider organizations earning a spot on GHX’s “Best 50” list reported that gaining visibility into data to inform decision-making and data standardization were the most important healthcare supply chain targets in 2018.

GHX limits the annual survey to hospitals and health systems that made the “Best 50” list. The GHX Best 50 represents provider organizations that have improved operational performance while reducing costs through supply chain automation. Hospitals and health systems making the list this year include Beth Israel Deaconess Medical Center, Hackensack University Medical Center, Kaiser Permanent Washington, and MedStar Health.

These provider organizations and their peers showed that data analytics remains a top healthcare supply chain management opportunity. Provider organizations that participated in last year’s survey identified predictive analytics as the greatest supply chain opportunity in last year’s survey.

Last year’s respondents also identified the use of data to better inform decision-making as crucial to the future of healthcare supply chain management.

“Supply chain leaders understand how critical quality data is to solving the large issues of cost, quality, and outcomes in healthcare,” stated Bruce Johnson, President and CEO of GHX. “Every year we initiate a dialogue with our customers about what is most critical to them in solving the cost-quality equation. There is consensus among this elite group that quality data is critical to steering their organizations’ decision-making, but that it also has the ability to improve the efficiency of business processes and is at the heart of linking business and clinical processes.”

In addition to better use of data and data analytics, providers organizations also expressed an interest in improving healthcare supply chain outcomes related to business processes. On top of data standardization, hospitals and health system also sought standardization of business processes across the organization.

Forty-seven percent of respondents also said that contract management was a top outcome they wanted to achieve in 2018, followed by driving integration across supply chain business and clinical processes with 42 percent of participants.

Broader management of non-labor spend was also a common healthcare supply chain target in 2018, with 29 percent of respondents.

To achieve the top healthcare supply chain management outcomes, the select group of hospitals and health systems identified several priorities in 2018 related to procurement, product standardization, clinical system integration, contracting, and system integration for mergers and acquisitions.

The top healthcare supply chain priorities by supply chain category in 2018 included:

Procurement: increase procurement and inventory controls, implement innovative procurement strategies, and cross-collaborate in strategic sourcing

Product standardization: standardize provider preference items across systems, implement product standardization strategies, and use value analyses to drive standardization and cost and quality improvements

Clinical system integration: implement 2D or 3D barcoding and bill-only workflow to EHRs, report supply chain spend and costs in the operating room and other procedure areas, use point-of-use automation, and implement demand pull inventory management at point-of-use or care

Contracting: implement new contract management systems, reduce off-contract spending, and create new committed compliance contract models

System integration for M&A: integrate newly acquired or affiliated provider organizations and clinics

Standardizing provider preference items and implementing contract management systems continues to top the list of healthcare supply chain priorities. Last year’s respondent also identified these items as top initiatives planned in 2017.

Provider preference items, in particular, strain the healthcare supply chain. These items account for between 40 and 60 percent of a hospital’s total supply chain costs.

While preference items give providers the flexibility to deliver care they way they deem best, these supplies can also be more expensive than others commonly used for the same treatment or be associated with worse outcomes.

Provider preference items may also sit on the shelf, resulting in wasteful spending. Medical surplus adds up to about $765 billion annually, according to a 2012 National Academy of Medicine report. And the issue has not been fully resolved at hospitals, a recent ProPublica report showed.

But providers organizations are attempting to reduce wasteful supply chain spending by still focusing on supply standardization and applying analytics across the organization, the recent GHX survey uncovered.

As hospitals and health systems continue to optimize their supply chain, leaders emphasized that a data-driven supply chain will be the future, the survey found.

“Supply chain leaders anticipate the use of this information becoming key to value (cost and quality) measurement and an important metric for assessing overall financial performance,” the report concluded.