From the Basement to the Boardroom: How the Shift to Bundled Payments Impacts the Supply Chain

Navigant's Rob Austin in AHRMM's Supply Chain Solutions & Strategies Magazine

Anyone who is familiar with hospital financials knows supplies are the second largest operating expense for a health system, after labor costs. Due to ongoing pressures on operating margins, healthcare organizations have increasingly leveraged reductions in the costs of supplies, physician preference items, and purchased services over the last 15 years.

Nonetheless, healthcare supply chain often remains undervalued within provider organizations. Some supply chain departments are housed in the basement of providers' facilities and have historically been viewed merely as order takers, processors of invoices, delivers of products – all of which are important, but fails to capitalize on the benefits that a well-functioning, progressive supply chain team provides.

With the onset of large-scale, value-based purchasing and bundled payments, however, there is a catalyst for health systems to develop strategic supply chain organizations. This change in payment methods continues to push the supply chain to a more central position in the overall operations and capabilities of progressive health systems.

Download the article and learn more about how the shift from fee-for-service to value-based payment models is impacting the whole U.S. healthcare field, with specific application to supply chain.

To remain competitive in today's environment, organizations now need supply chain talent with unique qualifications that were not necessary in the past. Advanced education, analytics acumen, clinical knowledge, and the ability to develop strategic relationships, as well as a broadened big-picture perspective are core qualification now required to succeed as a supply chain professional.

Rob Austin
Associate Director
Navigant

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