5 Actionable Steps Towards Supply Chain Cost Savings
STEP 1
Consider Total Value
“In healthcare supply chain, value is more than just cost; it’s the synergy of affordability, quality, and desired outcomes. By prioritizing defined processes, clinical input, and evidence-based decisions, we navigate towards optimal value. Recognizing that the cheapest option may not always ensure the best patient care.”
Ashley Brand | Director,
Spend Management
Action Steps
When approaching supply chain decisions, value must be a foundational part of the conversation. In your current review process, a good first step towards creating a united front for evidence-based decision making is to ensure these three questions are always being asked by your teams:
- Is the decision clinically acceptable
- Is the decision operationally feasible?
- Is the decision financially justified?
A complete guide to building a value analysis program from the ground up can be found here.
STEP 2
Prioritize Actionable Data
“Supply chain professionals require more than just pricing data; they need tools that offer contract analysis and objective current industry benchmarks. This ensures everyone in the organization is on board to make informed decisions for smart savings strategies.”
Dawn Plimmer | Director,
Purchased Services
Action Steps
Perform a quick internal audit, asking key questions, including:
- Do we have a current process in place today for contract analysis in relation to spend management? Is that process efficient?
- Do we have access to price benchmarking data to compare against our peers?
- Is that data GPO agnostic?
Completing a current state analysis will lay the groundwork for strategizing next steps to increase actionable data for cost savings.
STEP 3
Get Specific
“Optimizing your supply chain requires a vast array of strategies, data components, and levers, which are different for each type of spend and each category. It is key to create a playbook of repeatable strategies within your organization.”
Brandon Baca | Director,
Spend Management
Action Steps
Consider aligning your supply chain leads to create a 12-, 24-, and 36-month playbook for your organization while elevating communication with clinical directors to clarify goals.
Work together with finance, biomedical engineering, and IT to define key factors including data, strategy, and supplier negotiation considerations.
Analyze your past wins to identify patterns and ensure all categories of spend are addressed, being sure to tease out unique strategy differences across categories.
STEP 4
Reevaluate Low-hanging Fruit
“Keep in mind that the low-hanging fruit tend to grow back. Just because your team worked a category in the recent past doesn’t mean there aren’t opportunities for cost reduction or taking a fresh look.”
Eric Slimp | Director,
Purchased Services
Action Steps
Evaluating spend should never be a one and done action. To ensure spend is top of mind, make a rolling schedule to ensure each category is visited every 3-5 years, or even more frequently for larger categories, to ensure inflating costs are addressed.
STEP 5
Integrate Financial Education
“When I was a young physician coming into the medical field, I was unaware of the comprehensive and robust mechanisms we have in place for supply chain and how that impacts the clinical world. In our residency program now, we’ve started integrating financial education in the curriculum, which didn’t exist two years ago. At the end of the day, all roads lead to outcomes.”
Angel Mena, MD | Internal Medicine Residency Program Director, TriHealth, Chief Medical Officer, symplr
Action Steps
It all starts with a conversation. As a first step, arrange a meeting with your residency program lead and discuss common goals around clinical integration, outcomes, and delivering greater value to the organization through financial stewardship. Brainstorm and open the door to the possibility of including curriculum in the residency program to improve clinician awareness of supply chain activities and goals early in their careers for greatest impact.
Turn it into action
Ask yourself these simple questions to gain insight into the steps you need to take to enact the cost savings discussed above.
What People decisions do we need to make?
What Process decisions do we need to make?
What Technology decisions do we need to make?
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