Becker's Hospital Review

Executive Briefing: The Supply Chain as a Strategic Asset 71 quires understanding an organization's short-term and long-term purchase. Most hospitals overpay between 2 and 7 percent1 because they don't have the robust processes and required technolobjectives. Every facility should complete an assessment to unogy to ensure contract discipline at the transactional level, which derstand where it stands. It's imperative that any supply chain results in manual processing and tracking of pricing and delivery partner collaborate and engage the organization's leadership by their resources. According to Mr. Klumpe, senior leadership team, work out an implementation plan, identify areas for immedioften thinks their hospitals have more than 90 percent contract ate and long-term improvement and collaborate with the facility to compliance, when it may be closer to about 50-60 percent. "By make sure sustainable performance improvements are achieved. helping hospitals implement technology The many moving parts in any hospital and support around day-to-day contract supply chain are a challenge for mantransactions, we're able to help get con"The ready-made framework agement but yield financially rewarding tract compliance between 85 and 90 results when managed strategically. percent," he says. A successful supply chain thrives on for management of various strong leadership support, supply chain Better contract tracking supply chain functions is talent and technological solutions to to improve compliance enhance efficiencies and optimize cost Improved compliance comes in part useful for systemic reduction strategies. A comprehensive through making it second nature for approach with core elements keeps hospitals and health systems. While cliimprovement across any the supply chain operation disciplined, nicians and the supply chain team can which results in contract savings and a identify utilization initiatives designed size of hospital. Building a streamlined supply chain reducing the to control costs and manage inventory, sustainable, strategic supply total cost of care at all turns. value is only realized by consistent compliance to contracts. Implementing pro"The supply chain is made of interconcure-to-pay technology and processes chain requires understanding nected processes," says Mr. Klumpe, that manage supply chain transactions an organization's short-term "and having the infrastructure to meathroughout the entire process helps ensure these processes is fundamental sure purchasing compliance from reqto making the supply chain a strategic and long-term objectives." uisition to correct price at payment. For asset to any hospital. At MedAssets we both the provider and the vendor, utilizahelp hospitals analyze, measure and tion of a procure-to-pay technology that benchmark to what 'great' looks like in leverages a centralized contract catalog as the "source of truth" supply chain management, so those hospitals can improve in helps increase efficiency and compliance and ensures real-time the areas of greatest opportunity to impact their bottom lines and price accuracy. Furthermore, a procure-to-pay system will intereduce the total cost of care." Building a strategic supply chain grate with a hospital's existing enterprise resource planning sysfocused on cost reduction strategies, leadership and clinician coltem, further driving efficiency and value from the investment they laboration and performance metrics is core to healthcare providhave made in that system. ers reducing the total cost of care. n Building a sustainable model The ready-made framework for management of various supply chain functions is useful for systemic improvement across any size of hospital. Building a sustainable, strategic supply chain re- Footnote: 1 R. Lacy et al. (2001). The Value of eCommerce in the Healthcare Supply Chain. Industry Report. MedAssets (NASDAQ: MDAS) helps healthcare organizations to improve financial strength through innovative revenue cycle, spend and clinical resource management solutions that enable improved margins, cash flow, quality of care and patient satisfaction. More than 4,200 hospitals and 122,000 non-acute healthcare providers currently use the company's Web-based technologies and evidencebased solutions to help capture revenue, control cost, increase regulatory compliance and optimize operational efficiency to improve the care delivery process. As a result, the company manages annually more than $50 billion in healthcare supply spend and touches over $365 billion in gross patient revenues. For more information, please visit www.medassets.com.

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