How are you managing your non-acute supply chain?
By Elizabeth Hilla, Senior Vice President, Health Industry Distributors Association
August 2024 – The Journal of Healthcare Contracting
As healthcare procedures continue to shift into non-acute locations like surgery centers and physician offices, supply chain leaders find themselves responsible for more care locations than ever before. This broader scope of responsibility is challenging, especially given the diversity of non-acute care settings. Some are tiny, others huge. Single or multi-specialty. Near the main campus, or far from it.
For most organizations, the non-acute supply chain represents a tiny fraction of the system’s total spend – but a much bigger share of its challenges. These locations typically don’t have on-site supply chain professionals, and they don’t have the space to carry much inventory. As a result, your work to ensure that these sites are well-served may not pay off in big savings for the health system as a whole, but it will allow these providers to focus on patient care without being distracted by supply problems.
Fortunately, there are many channel partners available to help in managing non-acute supply chain.
- Hospital’s prime vendor distributor. If your primary distributor can service your non-acute locations, this may present some advantages, such as having more business on a single contract and simplified visibility to total system spend. Most acute distributors have extensive experience with LUM and point-of-use programs that may fit well for non-acute locations.
- Non-acute distributor. Several national and regional distributors focus primarily on serving non-care provider locations. These companies and their team members bring experience and capabilities tailored to surgery centers, physician offices, and other locations. They usually also know the ins and outs of connecting offsite locations to GPO contracts.
- Specialty distributor. Many types of specialized distributors are available to help with specific challenges. For example, a medical equipment distributor specializes in assisting with remodels and new facility set-ups, ensuring that equipment is delivered and installed quickly so that the new site can begin caring for patients as soon as construction is completed.
- Self-service or hybrid. If your organization has many locations in a tight geography, you may find it feasible to service them from a consolidated service center. It’s important to fully vet the pros and cons of such an approach, given the wide product array and high service levels required at non-acute facilities.
- E-commerce supplier. Technology-focused suppliers may offer simple online ordering and sophisticated reporting.
Almost all types of distributors are investing heavily in tools designed to help providers build visibility, ensure resilience, and save money:
- Data analytics tools to help you know what’s being purchased where, and identify opportunities to save money, increase GPO compliance, or both
- Procurement tools designed to increase standardization by supporting a formulary
- Last mile solutions to ensure product deliveries are on time, predictable, and consolidated
- Resilience solutions to increase supply availability and minimize back orders
Every health system is unique, and so is every non-acute facility, so it’s important to find the channel and the processes that work best for your organization.