OC Reilly Blog: Supply Chain Named Key Issue for 2014 in Healthcare

By Vicki White, Director of Business Development, OC Reilly Inc.


It may come as no surprise to those of us who deal with it every day, but Modern Healthcare magazine has named Supply Chain management as one of the key issues facing hospitals and healthcare systems in 2014.

In its Jan. 6, 2014 “Outlook 2014: The year ahead in healthcare business” issue, Supply Chain joins Insurers, Finance, Information Technology, the special factors facing Not-for-Profit and For-Profit Hospitals, and a host of other critical considerations facing healthcare in the 12 months ahead.

“Hospitals under any scenario will continue to focus on squeezing operating expenses. The cost of supplies will remain a key target as will reorganization of services to achieve greater efficiency,” cites the opening article. 

In the article dealing specifically with Supply Chain, it reads, “In recent years, hospitals have focused a lot of time and money on developing strategies that reduce supply costs.  Some health systems have even begun challenging once sacrosanct categories like physician preference items – the pricey joint implants and cardiac devices…These hospitals are also looking for ways to standardize use as a way to reduce costs and improve care.

“But not every organization has the capacity to adopt sophisticated purchasing strategies that require data, buy-in from physicians and clinicians, and investments in supply-chain staff and technology.  In a recent report, Standard & Poor’s analysts said the next level of savings for hospitals is ‘potentially unachievable.’”

We respectfully disagree.  Supply chain management has proven to be a remarkably fruitful source of cost savings – when performed in a careful, strategic manner, in tandem with an objective third-party consultant who can see the big picture with a clear eye.

Helping healthcare administrators gain control over supply chain issues is not just a key consideration for 2014, but every year.

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