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Healthcare costs continue to soar in the U.S. Over the years; the costs increased from billions to trillions. It is crucial for the healthcare industry to reduce costs. Negotiating for lower prices is not enough for the healthcare sector. To truly reduce the costs, hospitals must use the supply chain in innovative ways. The supply chain holds the second spot on the expense list of hospitals after labor. According to a study, the supply chain expenses could be lowered by $23bn with better operations, processes, and product use. Effective management of inventory, operational procedures, and spending is the key to proper management in the healthcare system.
Suppliers and providers are effectively using the supply chain to improve automation and efficiency and reduce price discrepancies, decrease on-contract spend, and better manage the synchronization of data that enhances the effectiveness of the supply chain. The transition from the traditional model to the value-based model has put pressure on U.S hospitals. Patients are now relating quality and cost performance to reimbursement. Providers now have to understand the cost of care they are providing. Integration between all supply-chain participants is a critical step for innovation.
Data is now the go-to options for the supply chain to function correctly. However, bad data can raise challenges such as lack of visibility and increased risk for more errors, and more. Using accurate data is significant in gaining clarity and generating revenue. Data synchronization with third parties is even more challenging. It requires a common point of interaction to drive accuracy. Data standardization is as essential as synchronization to improve communication across the industry. One of the main challenges is to keep all the supply chain participants on the same page. A virtual item master can create a single source of truth that ensures consistency among all who uses the data.
Quality data and standardized data are essential, but it is irrelevant if not used in the supply chain process. If the information is not entered into the systems and used in the business process, then the value of data is not realized. Trading partners are using the supply chain and incorporating common data into different systems is significant. Supply chain challenges need a collaborative effort, and the full integration of these activities will be a game changer.