Looking Beyond Your Traditional Hospital Supply Chain Savings
We are finding that almost everyone in the supply chain business is on top of their game when it comes to their price and standardization savings. Yet, we have observed that these same healthcare organizations aren’t looking beyond these traditional cost cutting measures to shrink their total supply chain spend.
What am I talking about? What I’m referring to is looking beyond your traditional savings to start attacking your purchase service cost which represents as much as 9% of your revenues and up to 50% of your total supply spend. More importantly, we have found that these non-traditional expenses can yield you as much as 12% to 18% (or $2,866 to $4,217 per occupied bed) in additional savings that can go right to your bottom line in less than 12 to 18 months.
If you are a regular reader of my Savings Beyond Price™ e-newsletter and my blog, you know that I have been singing this tune for many years. This is because I still don’t see enough hospitals, systems and IDNs capturing these big savings opportunities that I just talked about.
Now that the healthcare reform bill has been signed into law and is beginning to be implemented in small, incremental and then eventually big doses over the next few years, we as an industry don’t have the luxury of waiting until these new regulations are fully implemented to reduce our total supply chain expenses. We need to reduce our total supply cost today, tomorrow and every year going forward so that we are ready when our reimbursement from all sources contracts, evaporates and eventually becomes a very small stream.
To quote one of my favorite sayings, “Noah didn’t wait until it was raining to build his ark”; don’t you wait any longer to cut all of your supply chain savings to the bone.
Filed Under: Healthcare Supply Chain • savingsblog
