Hospitals’ Supply Chain Savings Opportunity Jumps to $25.4 Billion a Year

Average supply expense reduction opportunity approaching 18% per hospital without impacting quality

Even with ongoing efforts to streamline supply chain processes and product use, an annual Navigant analysis suggests the needle isn’t moving in the right direction. 

According to the study, hospitals could safely reduce their supply expenses by an average of 17.7% or $11 million annually per hospital. This equates to an annual cumulative savings opportunity of $25.4 billion — a 10.2% increase compared to 2017.

A deeper dive into the data also reveals that:

  • Lower supply spending isn’t negatively impacting quality at facilities with more efficient supply spending. 
  • Equal savings opportunities exist across multiple hospital characteristics, including size, location, and for-profit or not-for-profit status. 

View the infographic

The key takeaway for health system executives is that investments in supply chain management pay off. Those health systems with the highest-performing supply chains are combining data analytics, collaborative clinician engagement, and deep subject matter expertise to drive care delivery improvements to the benefit of the communities they serve.

Kevin Connor
VP of Supply Chain Management, TriHealth

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