Supply chain has the potential to be a multibillion-dollar hero in healthcare. With hospital bankruptcies up and margins down, a study by Navigant shows hospitals are spending $25.4B more a year on supply chain than they need to. Analysis shows “hospitals could safely reduce their supply expenses by an average of 17.7% or $11 million annually per hospital.” That’s a 10.2% increase over last year. (See analysis by Navigant.)
As facilities absorb the impact of these financial pressures on operations, facilities continue to throw away perfectly good, unused, unopened, unexpired supplies. Billions of dollars’ worth are going to landfills, when instead – given appropriate analytics and insights – inventory could be more efficiently managed and costs recouped by selling excess inventory to other facilities.
Remember, at a 2.1% national average profit margin, hospitals need $4.8M in new patient revenue to earn $100,000 in profit. Conversely, every dollar recovered or saved goes straight back to bottom line cash flow, dollar for dollar.
Not only is efficient supply chain good for financial performance, but it also reduces waste in our landfills – a green solution times two.
Read more on this at Money Inc, “A Green Solution Twice-Over.”