Transforming hospital supply chains to improve patient outcomes

One of the more common vulnerabilities in a system is the hospital supply chain, due to the numerous entry points and legacy systems that lack cyber security practices. Several high-profile breaches in recent years involved lapses in the supply chain.

Supply chain threats arise as a result of outsourcing suppliers, and the lack of verifiable physical and cyber security practices in place at the supplier. Suppliers do not always vet personnel properly, especially companies that have access to patient data, hospital IT systems, or healthcare facilities. Vendors do not always vet their own products and software for cyber security risks and may also be outsourcing resources as well. This allows perpetrators to exploit sensitive information across the supply chain.

Hospital supply chain best practice should be a high priority for organisations. COVID-19 has put additional strain on hospitals and resources, and a potential data breach is too high of a risk to take in the current environment. Poor security measures and data handling could result in fines of up to $2.1 million (for corporations with an annual turnover of more than $3 million). This makes it imperative that hospitals ensure data is protected through enforced organisation-wide processes that meet industry standards.

A 2016 report¹ into consumables stock management in hospitals by the Office of the Western Australian Auditor General found good inventory practices underpinning the State’s estimated $200 million annual spend on dressings, syringes, gloves and other consumables.

Given its State Distribution Centre (which feeds imprest stores in each hospital) held around $6.5 million worth of consumables (approximately 4 weeks of supply) on any given day, the need for close attention to balance supply and demand was clear.

But supply is not the same as use. The report found that once an item had left an imprest store, none of the hospitals in the State were able to say if it was used, discarded or remained somewhere within the facility. Actual use, and consequently waste of consumables, was unknown. This example illustrates why stock wastage is regularly listed as one of the key concerns for procurement leaders in healthcare. Every dollar wasted is unable to be invested into patient care.

The pandemic also resulted in increased demand for key items such as vaccines and PPE for the national stockpile. More than 78 million masks, 12 million gloves and 4.6 million face shields were dispatched from the National Medical Stockpile (NMS)². These millions of items have to be accounted for and integrated into stock management. Again, any operational inefficiencies could result in wastage.

As many of the world’s hospitals and health systems continue to experience a decline in funding and reduced revenue from delayed procedures, administrators are continuing to look to their supply chain for cost reduction efforts. Procurement systems that don’t integrate with patient administration systems are only doing half the job of inventory management. An integrated solution bridges the gap between the supply chain and patient administration system, enabling you to accurately record and automatically replenish items, and identify and investigate wastage and put business processes in place to reduce it.

Only when you have systems that track your inventory in real time are you able to understand, investigate, and reduce wastage.

When you consider the number and variety of consumables used in a typical hospital—from personal protective equipment (PPE) to high value prostheses—and the importance of being reimbursed for their use, it’s no surprise that leading healthcare operators around the country are transforming their supply chains to better manage costs and improve patient care.

An automated, digitised supply chain system can drive efficiencies across not only procurement and inventory management, but clinical operations and patient safety.

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