Supply Chain Technologies: On a Quest for Transparent Pricing and Greater Value

June 8, 2018
This article originally appeared on the Healthcare Financial Management Association (HFMA) website on May 1, 2018: 


Despite the importance of maintaining stock and availability of myriad products – from the critical to the mundane – those charged with keeping the supply lines up and running face constant and unprecedented pressure to reduce costs. And of course, these tensions come at a time when it’s easy for practitioners to be distracted by new technology – with new price tags as well. 

A wealth of new and upgraded products are being introduced into the supply chain mix, many with built-in intelligence and communications. This influx has highlighted the need for evaluation of care based on current recommendations and professional guidelines, according to Pam Daigle, vice president of strategic sourcing and performance groups at Premier.

“There needs to be a continued evaluation of care delivery based on what the evidence is and what guidelines say around particular care,” Daigle says. “When suppliers for value-based contracting make a claim – for example, that if you use their product, patients will have a better outcome – it is essential to then go back and examine the evidence to validate these claims.”

Daigle also advocates for clinically driven formularies that are selected based on both quality and cost data. “The real purpose behind formularies is to create more opportunity to reduce variation and standardize care,” she says. “Any time you can drive standardization, you’re going to drive improved care.”

Another example: offering a manageable number of standard kits for certain types of patient care versus stocking myriad individual components. “Using a clinically approved, standardized kit will support the established protocols throughout an institution,” Daigle says. “This practice also creates more negotiating leverage with suppliers, as more volume on fewer items can lead to further price concessions.” 


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