Three Lessons From Healthcare Procurement Applied More Generally

Over on Healthcare Matters, Tom Finn recently penned a great post examining three key lessons from where to focus procurement and supply chain initiatives in healthcare. But I believe we can apply his recommendations more generally. As Tom opines, when we started this blog "we intuitively knew that best supply chain practices are industry independent; that their applications in healthcare would yield extraordinary benefits. What are the three areas that Tom suggests which are industry independent yet particularly appropriate for healthcare? They're actually quite simple in fact: spend analysis, supply utilization and demand management. But how we apply the lessons by industry are certainly important.

Take spend analysis, for example, in healthcare, "providers of all sizes need to understand their 'spend' -- even better than their GPOs do...Providers must invest to establish solutions and reinvest to ensure a sustainable spend data capture, cleansing, normalization and sophisticated analysis capability. These days, best in breed spend analysis tools can be added to super charge legacy systems in a variety of networked implementations (e.g. SaaS) that are non-invasive and create pathways to insights that are game changing."

Tom's views get more interesting (and less standard) when beginning to mash up the procurement and supply chain elements in area of supply utilization. Here, "Getting a handle on inefficient consumption practices is becoming widely considered the ripest turf for professionals charged with producing the next wave of savings ... looking inward, identifying best clinical practice and optimizing around it to drive standards in supply utilization, is where the leaders are now focused ... The high-end consultants are out there pitching the C-suite with various approaches to dealing with physician variance. Supply utilization is front and center in those discussions, so be prepared." There are some great lessons from supply utilization we can apply to other industries as well, so stay tuned.

Jason Busch