Despite the disruptions to the supply chain caused by the COVID-19 pandemic, natural disasters, inflation and other issues, the healthcare industry continues to practice a 20th century procurement model that is opaque, inefficient and, far too often, leaves providers vulnerable and without critical supplies.
“Hospitals have seen the benefits that technology can bring to other aspects of care delivery and revenue cycle management,” said Bill Kopitke, General Manager and Head of Healthcare at Amazon Business. “Yet, most organizations are still operating within an outdated and lengthy procurement model that involves requests for proposals, intermediaries, long negotiations over pricing and over-reliance on one or two suppliers.”
In addition to the overall supply selection and negotiating inefficiencies, the actual process of procurement is also clunky. The frontline workforce is often reliant on managing stock and making purchasing requests. This is exacerbated when there isn’t an existing contract, requiring clinicians to stop patient care to make buying requests. For example, when new supplies are required, a doctor or nurse must log into an enterprise resource planning system to request the items, then detail why they are needed and where they can be found. The procurement department then reviews the request and may ask for additional documentation before granting approval.
“This is very burdensome for a workforce that is already understaffed and overworked,” said Kopitke. “But with a digitally managed alternative, you can democratize buying across your organization and put in the right guardrails and controls to keep costs down.”
Today, most consumers do their shopping online, and they expect a similar level of ease and convenience even when purchasing at work. Kopitke said healthcare professionals appreciate the ability to quickly look up and compare alternatives for supplies – and to immediately see a live price, inventory and quality rating based on buyer feedback. The success of ecommerce in the consumer realm has brought about a new supply chain model that can help healthcare organizations build greater overall supply chain resilience.
One of the most challenging issues for many hospitals is that the procurement department often has very delayed information on buying and availability – and it doesn’t have to be that way,” he said. “There are solutions that can provide a transparent and accurate look at the supply chain using the latest data and informatics to give you the purchasing information you need to make informed decisions. That real-time information gives you more accountability and control.”
Fortunately, today’s hospitals can find supply comparisons that infuse business buying with more resilience. New digital procurement solutions offer healthcare organizations a comprehensive product selection with competitive pricing and volume discounts. With these solutions in place, procurement leaders gain access to real-time data on spending and purchasing insights that enable bulk buying and tail spend management. Those insights also offer healthcare organizations the ability to plan and control expenditures more efficiently. Health systems that have embraced the digital storefront are seeing more resilience in their supply chain, as well as a wealth of efficiencies and cost reductions that benefit the entire enterprise.
“With this kind of procurement approach, healthcare organizations have the security of seeing what’s available – with access to data and informatics that are detailed and easy to use,” Kopitke said. “Working with a partner that offers back-engine capabilities to help weather all the different issues that can affect the supply chain empowers you to build the resilience you need to provide the highest quality care for your patients – and to do so in a way that keeps costs down.”
This article originally appeared in Healthcare IT News
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