Health systems face a site-by-site test as care moves beyond hospitals

As health systems move more treatment into ambulatory and specialist settings, managing supplies across those dispersed locations has become a strategic task, not simply an extension of hospital purchasing. The challenge is to connect central plans with what happens at each site: what staff order, what they keep in stock and whether essential products are available when care is delivered.

Brian Heyndrickx, vice-president of health systems and enterprise accounts at Henry Schein...

Medical U.S., argues that leaders need a clearer picture of local practices before they can identify where standardisation or savings make sense. In a network of clinics and outpatient centres, purchasing, inventory and supplier arrangements may differ from one location to another. Without reliable site-level information, leaders can struggle to distinguish avoidable variation from differences that reflect genuine clinical or operational needs.

The pressure to coordinate these settings is reflected in a 2023 State of Healthcare Performance Improvement report by Kaufman Hall. Among the organisations surveyed, 63 per cent were working to standardise supplies in non-acute settings, while 55 per cent were seeking to align ordering between hospital and non-hospital sites where possible to pursue volume discounts. The figures describe the report’s respondents, rather than the entire health sector, but they point to the growing importance of managing supply across a broader care footprint.

Standardisation is not simply a matter of issuing a system-wide purchasing directive. The American Hospital Association, drawing on case studies at Munson Healthcare and BJC HealthCare, describes the practical obstacles that can accompany organisational growth: differences in staffing, product choices, data quality and technology. Its analysis groups improvement work around people, processes and technology, underlining that a central strategy must account for local conditions if it is to take hold.

That same need for operational detail applies to clinical workload. A 2016 Cardinal Health survey of 403 US hospital respondents found that frontline providers spent an average of 17 per cent of their working week on inventory and supply-chain tasks. Service-line leaders reported 30 per cent and administrators 45 per cent. The findings are historical and relate to hospital respondents, not every outpatient or specialist setting, but they illustrate how supply processes can absorb time across an organisation.

The survey also recorded consequences when products were not available: 65 per cent of frontline respondents said patients had waited because the right supplies were missing, while half said a physician had lacked a product during a procedure. These results do not measure current conditions across the sector, but they show why supply-chain performance is tied to more than purchase price.

Heyndrickx says organisations should examine waste, excess stock, products approaching expiry, freight and the number of suppliers and stock-keeping units they manage. Small inefficiencies at individual sites can add up when repeated across a large network. He also points to the time clinicians spend ordering products, tracking down supplies and resolving avoidable problems.

Tecsys, a supply-chain software provider, describes how disconnected inventory practices can leave central teams with limited information about supplies held in clinical areas, how quickly they are used and whether they are nearing expiry. Such gaps can contribute to over-ordering, shortages and waste. The company’s account reflects a vendor perspective, but the operational issue is wider: supply decisions depend on accurate information about stock and consumption, as well as processes that work where care is delivered.

Building that visibility can also support risk management. McKinsey has argued that health systems need to understand vulnerabilities both within their own operations and across external supplier networks. It recommends prioritising more detailed inventory tracking for important or high-cost products rather than attempting to monitor every item, and working with distributors and group purchasing organisations to improve information about potential disruptions.

Heyndrickx advocates using more than one distribution relationship as part of a resilience plan, with acute and non-acute supply arrangements considered separately and partners expected to coordinate. That is a proposal from the Henry Schein executive, not a universal prescription: the best model will depend on a health system’s needs and the capabilities of its suppliers. The broader case for collaboration is supported by McKinsey’s emphasis on upstream information and by the Association for Health Care Resource & Materials Management’s focus on product transparency, shared data and demand forecasting.

For Heyndrickx, supply-chain planning also requires closer cooperation between procurement, finance and clinical teams. Data can give those groups a common basis for deciding which products should be standardised and where differences should remain. But the effects of a decision on care delivery and local operations need to be considered alongside its purchasing benefits.

His own career has included hospital materials management, 18 years in supply-chain leadership at Owens & Minor and work helping to establish a dental group purchasing organisation before he joined Henry Schein in 2023. In his current role, he says the company seeks to help health systems assess their non-acute networks, identify opportunities and track results. Henry Schein calls its approach ALIGN; the company describes it as a strategic process rather than a standalone product or software platform.

The larger test for health systems is whether purchasing arrangements and group contracts translate into consistent, workable practices at individual sites. As more care takes place outside hospitals, leaders must balance economies of scale with the differing needs of specialist and outpatient settings. That means treating visibility, inventory, supplier coordination and local execution as connected parts of the same management challenge.

Source: Noah Wire Services