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Kelley Jacobsen

Customer Care

Health Systems Need More Insight Into Inventory, Supply Chain

Amid rising prices, medical device supply chains need greater scrutiny and standardization

Published: Wednesday, October 4, 2023 - 11:02

In the wake of the Covid-19 pandemic, medical device supply chains are one of the top priorities for health system leaders. Amid supply chain disruptions during the pandemic, hospitals scrambled to find enough devices to keep up with unprecedented demand. The global crisis revealed gaps in standard operating procedures for how the healthcare industry manages supply chains to keep medical devices functioning. Now, while many supply chain issues linger, health systems also face surging costs at a time when operating margins are tighter than ever.

To successfully navigate existing supply chain challenges and inflation, health systems should have a process with rigorous quality standards and an in-depth understanding of their inventory and ecosystem of suppliers. This will give health systems more predictability, the ability to better control costs, and quality assurance to reduce risk.

Health systems need an in-depth understanding of their medical device inventory

The first step in creating this process is to establish a comprehensive inventory of a health system’s equipment. Many hospitals don’t have an accurate account of what equipment they own; TRIMEDX has found inventory inaccuracies within health systems can be as high as 40%. A comprehensive clinical-asset management system will alleviate this and provide quality data, such as where a device is located, how often it’s used, and when it will need to be serviced or replaced.

Health systems with accurate data and analytics will be able to make better ordering and stocking decisions in advance, making them less reliant on disrupted supply chains and less exposed to rising costs.

A centralized supply chain ensures access to devices and parts

Many hospitals report they still struggle to find supplies they need, with devices and equipment on back order. Some hospitals have as much as eight times more medical devices and supplies on back order than in 2019, according to a Modern Healthcare report.

Working with a vendor that can closely manage a health system’s clinical assets and establish a centralized supply chain will also help mitigate inflationary pressures and supply chain issues. Established sourcing relationships, combined with a deep understanding of a health system’s inventory and its use, will make supplies and devices more accessible—despite disruptions in the global supply chain or increasing costs.

For example, a health system that works with a partner that has consistent, contracted helium sources will fare better throughout the global helium shortage. A contracted helium source will be able to leverage its scale to lessen the exposure of a shortage. If a health system is sourcing helium on its own, without that trusted partner, it could be last on the list to receive helium necessary to run MRIs.

In the aftermath of the pandemic, many health system leaders have realized how essential it is to have an in-depth understanding of their inventory and their suppliers. Health systems working with well-sourced partners weren’t as heavily affected by supply chain problems at the peak of the Covid-19 pandemic. While many hospitals struggled to find enough ventilators, those working with a partner that had relationships with multiple suppliers and extensive sourcing strategies were able to find ventilators when they needed them most.

Dedicated supply chain teams help reduce risk, improve patient safety

Without a centralized supply chain team, hospitals sometimes rely on technicians to source devices or parts themselves. This can be especially challenging when prices are rising or supply chains break down.

Out of desperation, technicians in this situation sometimes resort to ordering parts on consumer websites or from nonqualified suppliers. This presents a significant risk to health systems and their patients. Parts ordered through a consumer website might not have been inspected or validated properly. If the part doesn’t function correctly, it could seriously affect patient care. This is why it’s critical to have an ISO-certified partner that has a rigorous supplier-quality qualification process.

Rely on a trusted partner to ensure financial and operational efficiency

A comprehensive management process through an expert partner helps health systems improve financial and operational efficiency. A McKinsey & Co. survey of 149 health system executives found more than half didn’t have dedicated personnel to engage with frontline staff about the supply chain. Relying on a dedicated supply chain team instead of adding sourcing responsibilities to a technicians’ workload will allow them to focus on their expertise and deliver quality service to their client. As prices continue to climb, a partner with scale and buying power will help health systems control costs and reduce risk. A health system looking to purchase a small number of devices for itself—or a technician buying a used part online—will likely pay a much higher price in the long run.

Quality parts from a reputable vendor can also reduce equipment downtime. A faulty part might last only for a matter of weeks or months, while a properly vetted part may last years. A health system could find itself replacing a part repeatedly and disrupting patient care with unexpected equipment downtime. A comprehensive management system allows a health system to anticipate when a part will need to be replaced or serviced well in advance.

Using quality, validated parts protects the huge capital investment a health system makes in its devices. If a health system isn’t using proper parts, it will likely have to replace its devices sooner.

A comprehensive management plan also guards against hidden costs. Not only do health systems frequently lack visibility into their inventory, but they also are often unaware of how they’re being charged by suppliers and outside vendors. Sometimes hospitals will find they’re paying multiple vendors to service the same device. If clinical engineering and supply-chain management teams are working in lockstep, this type of unnecessary expense can be avoided. In addition, a reliable partner can monitor price increases from vendors and seek alternative sources if necessary.

Be prepared for whatever supply chain or pricing issues come next

If a health system takes a holistic approach to managing assets, it will be better prepared for whatever supply chain or price challenges arise in the future. Relying on a dependable partner that has unique data and analytics, supply chain depth, and buying power will help protect a health system against the unexpected.

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About The Author

Kelley Jacobsen’s picture

Kelley Jacobsen

Kelley Jacobsen is senior vice president of supply chain and shared services at TRIMEDX. In this role, she is responsible for strategic sourcing, centralized procurement, digital system and data transformation, service strategy, and execution. In addition, Kelley leads the company’s supply chain strategic direction, optimization of service strategy, as well as business and technical training curriculum and programs for TRIMEDX University. Kelley has experience in manufacturing operations, global supply chain, and training, and has worked in a variety of roles in the automotive and healthcare industries.