John Kupice, CEO of H-Source, was recently interviewed by Future Tech Podcast on the new opportunities medical facilities have to reduce financial waste in supply chain while providing quality healthcare to their communities.
In the U.S., we waste an estimated $10B in brand new, unexpired, undamaged medical supplies and another $5B in non-controlled pharmaceuticals. And those are conservative estimates. End-to-end, our healthcare system wastes $765B annually. That's bigger than our defense budget.
At the same time, the national average profit margin for hospitals has reached a new low at an estimated 1.8% for 2018. At that margin, hospitals have to earn revenue of $56 to make $1 in profit, or they can simply cut $1 in expenses. With supply chain costs predicted to top labor costs by 2020, supply chain is a prime target for renewed scrutiny and cost reduction.
A lot of the supply chain waste comes from things like physician preference items, contract changes, product upgrades, and minimum purchase requirements. But here's the thing - instead of just letting products expire and throwing them away, or even selling them for fifteen cents on the dollar, why not sell them directly to other medical facilities for far greater cost recovery? It's a win-win-win for the seller (much greater cost recovery), the buyer (reduced spend by purchasing items at a reduced rate), and the environment (less waste in our landfills).
To learn more, listen to this edition of Future Tech Podcast.