Digital advancements will facilitate supply chain efficiency

AI and automation will buttress supply chain expertise to aid healthcare’s digital transformation, supporting emerging trends such as hospital-at-home.

Hospitals and health systems across the United States are steadily recovering from the operational and financial challenges of the past several years. Looking ahead to the coming year, we can expect a rapid acceleration of healthcare’s digital transformation.

Healthcare executives are prioritizing technology investments to enhance organizational and financial efficiency, enabling their organizations to keep pace with industry changes like ongoing consolidation, consumerism and care beyond the traditional hospital walls.

Specifically, we will see the industry’s ongoing efforts to automate and digitize supply chains, aiming to maximize cost savings and meet the evolving demands of the healthcare landscape. The emphasis will be on greater levels of automation and improved access to accurate, comprehensive and clean data sets, which will drive new levels of innovation and collaboration among stakeholders. 

Here are a few trends to watch during the year ahead.

VBC and the shift to a strategic supply chain

With the shift toward a value-based care model, supply chain leaders face the dual challenge of adapting to a new business model and prioritizing cost savings. The C-suite is asking supply chain leaders to play an increasingly more significant role in delivering high-quality and affordable care to patients. This necessitates a proactive approach to managing inflation, cost pressures, workforce issues and the need for greater resilience.

In 2024, the role of supply chain teams in supporting healthcare organizations' overarching mission and goals will further escalate in significance. Teams struggling with fundamental procurement tasks will lack the necessary resources to meet the demands of value-based sourcing, which requires comprehensive data on the cost, quality and outcomes of the products used in patient care.

Consequently, we can expect to see more investment in driving greater automation of procurement tasks. This automation will help produce savings and improve visibility across hospital procurement and supplier fulfillment departments, regardless of the care setting. This creates a foundation for the analyses that empower providers and suppliers to make needed operational and clinical improvements, from financial management and cost efficiency to waste reduction and improved patient outcomes.

Trading partner collaboration, process automation

In light of limited working capital, healthcare supply chain leaders are increasingly leveraging process automation to optimize operations. A promising trend for the upcoming year will be ongoing collaboration between trading partners to extend automation beyond procurement and into invoicing and payment processes.

This trend is gaining traction in the implantable device supply chain, with healthcare providers and suppliers seeing the benefits. By 2032, the implantable device market is projected to reach $166.3 billion. It’s worth noting that implant orders account for approximately 10 percent of all purchase orders, representing 40 percent to 60 percent of supply chain expenditure. However, only a tiny portion is automated because of the unique nature of implant orders, which complicates procurement and invoicing processes. As a result, a significant amount of human effort is still dedicated to performing these tasks.

During the year ahead, we can expect providers and suppliers to continue collaborating to establish guidelines and best practices for standardized and optimized implant order management. The focus will be on data capture to drive the minimum essential data elements required to support consignment implant orders.

Managing implant orders similarly to non-implantable med-surg spend will help improve transaction accuracy, reduce the frequency of pricing discrepancies and decrease the time to purchase, invoice and payment. It will also significantly reduce administrative tasks and associated costs in the procure-to-pay and order-to-cash processes and build a data foundation upon which valuable clinical, financial and logistical insights can be delivered. This becomes especially critical in the ambulatory surgery center segment, where implants play a vital role in cost delivery. The logistics involved are often more disparate, requiring the insights that automation can provide.

Non-acute care growth fosters strategic partnerships

Clinicians, patients, executives and insurers are getting more comfortable with care being administered at home, commonly called hospital-at-home (HaH). Although the market is still evolving, it is projected to grow from roughly $200 billion in 2023 to $300 billion by 2028.

Supply chain leaders must begin to develop strategies and implement technology solutions to capitalize on this burgeoning opportunity. To provide hospital-level care to patients in their homes, a healthcare organization must efficiently deliver nursing care, equipment and supplies to their doorsteps. Ensuring everything and everyone arrives in the right place at the right time for a specific episode of care is logistically complex. Supply chain teams will need to acquire new competencies and adopt innovative solutions to effectively meet this care model's demands.

Healthcare supply chain teams must also utilize resources within their ecosystem to facilitate non-acute care delivery. This may involve partnering with distributors that can handle the supply logistics for home delivery or contracting with local medical-surgical suppliers.

Improving clinical integration with AI and human experts

Artificial intelligence (AI) is gaining popularity in healthcare organizations that value connectivity and are implementing data lakes to manage their clinical, supply chain and cost data. It's important to emphasize that AI is not intended to replace clinical or supply chain decision-making but rather to assist decision-makers in identifying utilization trends and potential opportunities while removing repetitive manual tasks.

To better understand the concept, consider the analogy of baggage screening technology in airport security. These tools flag items that may require further examination by TSA agents because of potential risks. However, it is ultimately the expertise and experience of the TSA agent that determines how to interpret and respond to this information.

In healthcare, AI can rapidly analyze large volumes of data to uncover valuable insights. However, the human expert, such as a clinician or supply chain professional, will ultimately decide how to act on this information, drawing from their expertise. AI will be a powerful tool to enhance decision-making, not replace it. In 2024, we will see an increase in the implementation of AI models that keep humans in the loop.

The healthcare industry has experienced a remarkable rate of technology adoption during the past several years, with no sign of deceleration. The road ahead is promising but not without challenges. Next year, we can expect to see the culmination of several years of investment and effort come together in a more cohesive and integrated way. This will undoubtedly lead to significant advancements in enhancing patient care quality and the industry’s financial and economic outlook.

Chris Luoma is chief strategy officer for GHX.

More for you

Loading data for hdm_tax_topic #reducing-cost...