Due to rising concerns of supply chain disruptions, facilities of healthcare have started feeling the heat in global contexts. Starting with inflation and not limiting itself to geopolitical tensions, the list of problems keeps on growing and deeply affecting business expenses and patient outcomes. The Premier report, published recently, has explained how these healthcare supply chain shortage affect providers and suppliers, showing the financial and practical burdens the industry carries.
The Financial Burden of Supply Shortages
For a typical health system with five hospitals or 650 beds, supply shortages can escalate costs dramatically:
- $3.5 Million Increase in Care Costs: These additional costs are the result of increased cost of resources that are limited by the market and inefficient acquisition of these resources.
- $1 Million in Excess Inventory: There is sometimes overstocking whose purpose is to avoid shortage and this results in capital being locked up in idle stocks.
- $350,000 in Lost Revenue: Lacks of these supplies complicates the delivery of efficient services, thus reducing source of revenue.
The above rumour highlights the importance of sound supply chain management strategies the healthcare sector most acutely requires.
Key Challenges Driving Supply Chain Issues
Premier’s survey of healthcare and supply chain leaders identified several factors contributing to the ongoing shortages:
- Persistent Inflation: Maintaining a control over cost of goods and services continues to be a main topic of interest among providers and suppliers.
- Transportation Disruptions: Logistics issues which include export lottery, global namely conflict, environmental issues, etc., add up to supply chain issues.
- Labor Shortages: A shortage of professional workers in the supply chain and healthcare sectors increases the challenge of operations.
Sanctions also have a great effect. Political tensions between countries, such as the Russia-Ukraine war, tensions in the Red Sea, and high military activity in China, are also important factors. Stephen also expands the list of threats via severe weather and cybersecurity threats.
Survey Insights: The State of Supply Chains in 2024
Premier’s findings offer a comprehensive look into how supply chain challenges have evolved:
Expectations for 2024:
About 80% of healthcare leaders and 84% of suppliers also expect supply chain challenges to remain the same or become even more difficult.
Geopolitical Impact:
- Geopolitical and environmental concerns disrupted supply chain in 2023; the disruptions impacted more than half of the suppliers.
- 85% predict that regulation will affect their strategies in 2024.
Time Spent Addressing Challenges:
Survey respondents reveal that 67% of healthcare leaders spend more than 10 hours a week on supply chain control; some leaders spend up to 20 hours on it.
Top Disrupted Products
The most affected medical supplies of the past one year are syringes, sterile water, i/ v fluids, aortic balloon catheter and surgical tourniquet. Such disruptions typical affect the type of patient care where important procedures are delayed and consequently more risks are incurred by patients.
Resilience Strategies: Moving Forward
Despite these challenges, healthcare facilities are adopting several strategies to bolster supply chain resilience:
- SKU Rationalization: Simplification of the existing product range by reducing unnecessary items, which 62 % of the leaders plan to do in 2024.
- Supplier Performance Metrics: Key performance indicators with suppliers, a concept followed by 54% of the respondents.
- Improved Contracts: More than half of the leaders interviewed are adjusting the terms of the supplier contracts to guarantee dependability.
However, financial constraints still exist with 65% of the respondents perceiving that supply chain resilience is difficult to attain.
Conclusion
Shortages of supplies themselves are not just logistical issues, but are financial and operational disasters in healthcare facilities that require addressing. Solving these problems will necessitate a continuous introduction of different concepts and ideas, engaging cooperation between industry players and various legislations, and government intervention. This way, health care systems can also strive to address the costs, care, as well as the future’s challenges.
