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Insights from Our Senior Supply Chain Leaders

Mike Langlois | Wednesday, May 22, 2024

     Last month, during the Spring IDN Summit, Brent and I hosted the biannual Senior Executive Forum (SEF). I would like to share some of the discussion from that forum not only with other healthcare supply chain leaders, but also with the suppliers who provide us much needed products, services, and capital equipment. I feel that it is important for our suppliers to understand the challenges and initiatives that are important to those on the “other side of the desk.” Brent and I have often written about collaboration, and this is an opportunity to understand what challenges you can help with and what opportunities you may be able to take advantage of in the near future.

Supply Chain Healthcare Leaders are facing many disruptions that often cause a drain on time, money, and emotions. Some of the current disruptions shared during the SEF include:

  • Mergers and Acquisitions: the time it takes to collaborate with other hospital or health system staff and decide upon leadership, staffing levels, GPOs, distributors, product standardization, policy and strategy standardization, logistics, etc. can be very stressful and rob any leader of time spent on other initiatives.
  • Capital Projects: as funds have been loosened up for major capital projects since COVID, time investment is required to identify the right capital, negotiate costs, and, in some cases, oversee implementation. Although these investments can improve quality of care, they generally to not result in reduced operating costs, usually a primary goal for supply chain.
  • Cyber Security: we have all been made aware of the dangers of hackers and ransoms for illegally obtained Health System patient information. Supply chain leaders are increasingly becoming involved in developing strategies to prevent these events from occurring. It is a time and effort drain that brings no real tangible cost reduction or improved patient care that can be measured as a “non-event.”
  • New Information Technology: A major drain on supply chain leaders time is the implementation of a new ERP or EMR system. Coordination of design, interfaces, and new processes are extremely intense.
  • Movement of Care to Outpatient Facilities: as the increased use of outpatient facilities versus our acute care sites becomes more prevalent due to increase patient satisfaction, strategies must be developed on how to support these facilities in an efficient and cost-effective way.

Other significant challenges articulated at the most recent SEF include:

  • Staffing Recruitment and Retention: this continues to be a national challenge as staffing demands continue to outpace available supply. Discussion ensued on possible strategies including a longer day/shorter work week for staff members, automation, and recruiting from non-traditional sources such as clinical staff who may be burned out from long hours and weeks during the COVID-19 pandemic and/or college graduates looking for a rewarding career in healthcare.
  • Financial Pressures: No Margin, No Mission. I have not had one year in my 45 year career when I have not felt pressure to reduce costs. Leading the way during our discussion included Payor Mix Changes (not for the better), traveling nurse and other staff expense (although this seems to be subsiding), cost of implementing increased resiliency in our supply chain, and the opportunity to work with our suppliers to get their SG&A down from 35% in the healthcare world to closer to that of the grocery industry (~16%). Also, challenges still exist in getting our physicians on board to reduce unnecessary use of high-cost products and services.

     These were most of the topics discussed with some suggestions offered, but more challenges articulated than solutions identified. We left the forum with a list of topics to be discussed at the 2024 Fall IDN Summit including:

  • New Technology and Automation
  • Supply Chain/Healthcare Economics/Forecasts
  • Connection with Higher Education with Supply Chain Programs
  • Key Performance Indicators and Service Level Agreements
  • Value Analysis Processes as they relate to High-Cost New-Technology
  • Distribution/Consolidated Service Centers as a source of Revenue
  • Workday ERP as it applies to Healthcare Supply Chain

     Networking at past IDN Summit Senior Executive Forums has been a great resource for the healthcare supply chain leaders who attend. I am hoping that sharing some of the discussion at our past SEF provides some insight on major issues facing our leaders today and I am counting on some solutions coming via collaboration with our peers and suppliers.

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