Hospitals that Streamline, Optimize Their Supply Chains See Billions in Cost Savings, Navigant Study Finds

Navigant Supply Chain Study via FierceHealthcare

Hospitals could save billions each year if they streamline and optimize their supply chains, according to a new Navigant study.

Navigant examined public data from Definitive Healthcare that was recorded between 2015 and 2017 and included more than 2,300 U.S. hospitals, and found that the hospitals that performed best in supply chain management spent $23 billion less than the others on supply chain costs, an average of 17.8% in expense reductions. The remaining hospitals in the study, about 76% of those studied, could see similar savings if they took steps to improve their own supply chain management, saving as much as $9.9 million per hospital.

And the hospitals that performed the best on supply chain savings in the study didn’t sacrifice care quality to achieve cost reductions, particularly because these facilities reduce the clinical variation that comes with less streamlined purchasing, Rob Austin, associate director for Navigant's Healthcare practice, told FierceHealthcare. “It actually creates a safer, higher quality environment,” Austin said.

 

The hospitals that performed the best on supply chain savings in the study didn’t sacrifice care quality to achieve cost reductions, particularly because these facilities reduce the clinical variation that comes with less streamlined purchasing. The top performers were consistent in several areas that suggest methods other hospitals should consider when optimizing their supply chains. For example, engage clinicians in supply chain management, gather and analyze data effectively, and include supply chain in major strategic planning.

Rob Austin, Associate Director, Navigant via FierceHealthcare

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