Rethinking Medical Supply Chain Costs: Good to Great

By , VP of Business Development, CHC Supply Trust May 15, 2020 Financial Performance, Supply Chain

Many rural hospitals today — health care providers whose mission is to serve their community’s health care needs — are apprehensive about their own financial health. Increasing expenses, decreasing reimbursement and declining patient populations as well as hospital admissions place these hospitals at risk, threatening financial viability.

Besides salaries, supplies are the second-highest expense for hospitals. By reducing those costs and better managing the medical supply chain, a hospital can move its savings margin from good to great.

Unlocking Medical Supply Chain Savings In Order To Support Mission-Critical Objectives

CHC Supply Trust, the medical supply chain services arm of Community Hospital Consulting, works with hospitals to help them evaluate potential savings opportunities by uncovering “hidden” dollars to offset shortfalls due to reimbursement cuts and reduced payments. Unlocking medical supply chain savings can support mission-critical objectives such as equipment upgrades, development projects or hiring additional staff as necessary.

Supply chain support services to help hospitals reduce costs while prioritizing clinical quality and patient safety through CHC Supply Trust include:

  • Supply Chain Consulting
  • GPO Access Only (a GPO for community hospitals with preferred pricing formerly available only to their bigger counterparts)
  • Customized Support Services Agreement
  • Outsourced Materials Management.

CHC Supply Trust Delivers Access, Medical Supply Chain Savings, and Support

Teaming up with community hospitals, CHC Supply Trust offers a Complimentary Supply Spend Analysis. Whereas annual savings have averaged greater than 10 percent, recent CHC supply spend analyses have identified savings opportunities reaching as much as 15 to 20 percent. Along with 100 percent of GPO rebates returned to participating facilities, CHC Supply Trust hospitals can keep their bottom lines healthy.

For example, 25-bed Community Hospital in McCook, Nebraska previously bought its supplies and services from a nationwide hospital network. As part of the network’s supply contracting company and GPO, Community Hospital was subject to volume-based tier pricing. As a result, Community Hospital paid approximately 35 percent more than larger hospitals for orthopedic implants. By purchasing those same items through CHC Supply Trust in FY 2013, savings on orthopedic implants alone totaled $334,000. Today Community Hospital continues to see approximately 18 percent savings annually on its supply spend.

How CHC’s Supply Spend Analysis Process Works

It’s easy to get started on your Complimentary Supply Spend Analysis. Follow these simple steps:

  1. Sign the CHC Supply Trust confidentiality agreement (we protect the confidentiality of your data).
  2. Provide 12 months of both medical and surgical supply data in Excel format (easily available by contacting distributors who have this information in a standardized report already).
  3. Provide at least 90 days of pharmacy supply data in Excel format (from their wholesaler).

Once we have this information, CHC Supply Trust will conduct your Complimentary Supply Spend Analysis. This is done in order to calculate how much your hospital can save by accessing preferred pricing through our GPO for the exact same items you already buy. No MMIS mining is required. We will provide you with a letter template requesting your pharmaceutical wholesalers’ and med/surg distributors’ reports, which can be generated with a few mouse clicks.

By , VP of Business Development, CHC Supply Trust May 15, 2020 Financial Performance, Supply Chain

Stay in Touch

The CHC team is ready to help your community hospital. Take the first step and sign up to receive our educational emails.