HFMA VIEWS

Scott Downing
Group Senior Vice President of Supply Chain Services, VHA Inc.

If Magellan had seen a satellite view of the earth, sailing around the world wouldn’t have been so scary. Okay, it still would have been a challenge, but at least he would have felt confident that he wouldn’t fall off the edge of the earth. With the right approach, you don’t have to fear uncharted territory in the complex world of health care logistics.

We’ve seen what happens when hospitals go it alone. Billions of dollars are wasted each year because hospitals overpay for supplies, haven't standardized expensive physician preference items, allow some supplies to expire, or pay more in rush charges because they don't know what's on their shelves. Industry collaboration is the solution — and it’s going to save everyone a lot of money.

Supply costs are a hospital’s second-largest expense, representing more than 30 percent of its annual budget. However, research shows that wasted supplies cost U.S. hospitals $11 billion annually. How much is yours?

Hospitals’ analytics experts have been trying to chip away at this amount. While individual health care companies each own a piece of the complex supply chain puzzle, no one can solve it alone. It would be foolish to keep your piece to yourself because you would never be able to see the bigger picture.

Key industry players are collaborating to explore cost-saving supply chain solutions and create measurable changes in healthcare logistics. VHA Inc. has joined forces with Wal-Mart, Proctor & Gamble and Blue Cross Blue Shield of Arkansas, Alabama and Illinois to become part of the University of Arkansas’ Center for Innovation in Healthcare Logistics. This partnership’s goal is to increase the health care supply chain's efficiency to ensure that the right materials are in the right hands where and when medical professionals need them.