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February, 2014
Hospital Newspaper - NJ
Ask An Expert By Roberta Knab Senior Vice President, Nexera Management Services
Outsourcing for an Optimized Supply Chain For hospitals, the pressure to cut costs is nothing new. But within the developing quality-driven, collaborative healthcare environment, there are robust incentives for improved efficiency and cost-effective, value-based decision-making on the hospital floor and beyond. With performance-based rate cuts projected to be as high as 20% by 2020, optimizing hospital supplies and services management and procurement remains a key strategy for garnering quality, clinically valuable care while maintaining a solid bottom line. According to a recent analysis, hospitals must cut expenses by 10% just to preserve today’s margins without sacrificing safety or the quality of care. Supply chain expenditures represent 25% to 33% of a hospital’s total expense budget and are thus an ideal target for making a significant dent in institution-wide costs. With its unique cross-disciplinary position, the supply chain is charged with a more prominent role—moving away from a transactional, cost focus to enhancing clinical value (which can lead to a reduction in overall institutional costs). That’s where Nexera comes in. For over a decade, Nexera has leveraged its supply chain knowledge and strategic expertise to tailor supply chain management and procurement practices that support our hospital clients’ operational efficacy and financial goals. Since 2003, we have helped healthcare clients save more than $200 million. Using a costquality-outcomes (CQO) approach to supply chain management, where cost is just one component of the decisionmaking process, we collaborate with hospital staff to deliver system-wide information about the impact that supply chain decisions have on budgets and resource availability, then offer product alternatives and utilization reviews to better inform decision-making. We develop an evidence-based process that uses institutional data, validated savings, and goal tracking to support strategic decisions. Recognizing each organization's individuality, Nexera offers two options for our clients’ supply chain needs: short-term supply chain management or long-term comprehensive cost management. Both include a range of services—from value analysis and contract management to sterile processing and cardiac cath lab supply management. The decision to incorporate a third party into supply chain management is never an easy one. A thorough institutional self-assessment is needed beforehand, weighing the risks and benefits, including the cost and operational impact, and determining organizational core competencies. However, for hospitals with limited resources, outsourcing can provide the opportunity to construct a healthy, lean supply chain that is grounded in strategic, efficient processes with the necessary support and direction to stay running up to speed in today’s demanding healthcare landscape. Roberta Knab is Senior Vice President, Nexera Management Services. She is a healthcare professional with over 16 years of experience supervising initiatives for supply chain operations, including materials management and purchasing, strategic sourcing and contracting, cost reduction through operating and strategic improvement, value analysis, and vendor management.