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Supply Chain Management in Healthcare Industry

Supply Chain Management in Healthcare Industry

As an overall business arm of the vastly spread medical industry in the United States, Healthcare Supply Chain Management is basically a series of processes and workforce involved across different teams and movement of drugs, surgical equipment, and medical billing and coding procedures as needed by healthcare professionals to do their job.

The importance of supply chain management in healthcare is to look out for vulnerabilities among sections and propose measures to reduce them. The objective is to identify weak areas to achieve targeted health outcome and increases investments in global health. The positives of efficient supply chain in the healthcare industry is improved processes, effective utilization of resources, gratified employees, active treatment, happy patients, and most vitally and streamline income cycle in the form of timely reimbursement.

The significance supply chain helps facilities analyze possible loopholes in the healthcare and recommended controls which can be useful practically so as to bring improvement in the healthcare. In hospitals an incorporated supply chain should be executed to meet the objectives, as it ensures proper linkage of the various hospitals departments, operations and revenue cycle management. The supply chain can be envisaged as a back end program running which is necessary to integrate all the different processes together. Once the supply chain management is implemented, it ensures availability of medicine/drugs at right time, lowering the inventory wastage, maximizing patient care, coordination in all departments, and minimizing medical billing and coding errors.

Is healthcare supply chain management complex?

On the outset, healthcare supply chain management is complex as well as unique because each stakeholder has their own interests to protect. Different stages in the management flow may be focused on their own goal. Insurance providers would want to use a specific product because they were trained at it, whereas hospital staff aims to purchase the most affordable quality items. Since supply chain goals are not always affiliated within an organization, the supply chain management process can be disorganized and fragmented. Healthcare facilities must take into consideration numerous requests and viewpoints to settle on specific product budgets. However, patients also have a voice in this supply chain management process. For instance, healthcare facilities may be able to regularly order the correct sizes of gloves and keep them stocked, but there are patients who need more customized medical products, like the latex-free options, depending on their health status.

Similarly, providers may favor a specific brand or type of medical product, which could lead to cost concerns.

Supply Chain Management and the future of Healthcare

A healthcare system that delivers the right product at the right time and place can become reality, if all the stages in the healthcare cycle are well defined. But for this to happen providers must work meticulously to develop the core competencies required to make accurate assessments about inventory and avert spending increases that occur with little to no justification. Sustained investment in automation and medical data analytics, as well as a push towards greater data transparency and reliance on more streamlined standards in the field of revenue cycle management and medical billing will help to mend broken supply chain links.

Healthcare organizations are now realizing that greater alignment of revenue cycle management and clinical data systems may help deliver high quality, low cost care.  A combined revenue cycle management and supply chain approach may amplify claims management process and reimbursement accuracy and make cost-to-charge data capture more seamless than before. As providers tentatively put more and more of their income cycle at risk through value-based contracting, they must redefine their supply chain management primacies to ensure that they can influence new technologies to cut extraneous costs. 

Lastly, to succeed in this new period of healthcare reform, healthcare leaders should evaluate their supply chain management actions, consider the procurement of analytics tools, and prepare for a future in which every dollar, along with every box of medicine/drugs can be tracked, managed, and used effectively.

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