The Need to Rethink Your Supply Chain and Sourcing Strategy

by Michael Berryhill, Chief Operating Officer
Outlet: The Journal of Healthcare Contracting

Various complexities to healthcare supply chain and sourcing strategies have become a permanent part of the post-pandemic landscape. Simultaneously, there has been a large shift in payer dynamics, global dynamics, ambulatory growth, home health and virtual visits that also impact operating margins for healthcare providers. As a result, providers must adopt a refreshed perspective on their supply chain and sourcing strategies for cost management.

Needed Shifts in Supply Chain and Sourcing Strategies

Supply chain disruptions, labor costs, and other factors have caused providers to compensate for lost revenue by performing surgeries and adding new service lines without increasing investments in infrastructure support. There are opportunities to enhance value and mitigate supply chain disruption through various areas, including, but not limited to:

  • Managing Inventory: Regularly assessing inventory to identify requirements and eliminate unnecessary expenses. This often leads to updating and modifying inventory based on volume and expansion.
  • Optimizing Purchased Services: Using benchmarks and analytics to comprehend and reassess expenditures in nontraditional categories such as purchased services, which can lead to substantial cost savings.
  • Shifting Administrative Tasks: Nurse workloads are increasing due to complexity of patient care and the shortage of nurses.  Nurses are often consumed with administrative tasks, therefore there is a significant opportunity to shift administrative tasks elsewhere to enable nurses to work at the top of their license.

Healthcare is constantly faced with disruptive forces, ranging from staff retention rates, to constrained resources, to the growing occurrence of crises such as pandemics and economic downturns. Healthcare leaders must embrace current realities, foster innovation, and seek unconventional methods to expedite value and redefine their approach to ensure success and remain competitive.

Additional Solutions to Consider

The focus on solving immediate challenges and bandwidth limitations may inhibit many healthcare facilities to miss out on quick-win opportunities. Providers should consider nontraditional methods to identify new areas for improvement, such as:

  • Harnessing technology to address workforce demands – Technology can improve supply management and clinical care by improving workflows and reducing administrative burden.  This may allow physicians and nurses to spend more time with patients and provide supply chain professionals more time to focus on other opportunities.  For example, evaluating a virtual nursing model (e.g. voice recognition, remote charting, etc.) as a new care model to support nurses and patients.  Or in supply chain, evaluating advanced analytics to optimize operations (cloud infrastructure, AI, etc.).
  • Standardizing product formularies – Standardizing supplies may reduce variation in care, which improves quality, increases efficiency and makes for a better patient experience. Standardization may also improve inventory management and allow manufacturers to streamline operations.
  • Optimizing care room sequencing – Rearranging care rooms not only enhances the usability and efficiency of frontline supply management, but also reduces patient wait times, minimizes staff travel distances and improves overall processes.
  • Promoting continuous learning practices – While adaptability is essential, well-informed adaptability holds even greater significance. Healthcare leaders should dedicate time to visiting external healthcare facilities, forging close partnerships with clinical and administrative teams, and working with third-party experts to gain new perspectives.

Disruptions and global dynamics have and may continue to alter sourcing strategies. To navigate challenges that lie ahead and excel in the dynamic healthcare industry, providers must embrace unconventional and transformative strategies that extend beyond pricing considerations.

Working with a specialized team, such as HealthTrust Performance Group, can help healthcare providers adjust their supply chain and sourcing strategies while yielding valuable insights. HealthTrust has extensive operational knowledge and experience across a diverse range of healthcare facilities which allows for implementing impactful changes customized to the unique needs of each facility.

I’m glad to discuss these issues and how HealthTrust can help you reconsider your supply chain and sourcing strategy. Please contact me at

About Michael Berryhill
Michael Berryhill is the Chief Operating Officer for HealthTrust Performance Group, a leading healthcare performance improvement company. In this role, Berryhill oversees the operational and administrative functions of the business including strategic sourcing (U.S. and global), contract management and administration, supplier diversity, customer service, legal, and manufacturing. He also has oversight for purchased services, medical device contracting and the non-acute segment of the business.

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