Health care spending is expected to reach $4.8 trillion by 2021, according to a report by Aetna Inc. This means that health care spending will be almost 20 percent of the gross domestic product.
The Health Care Cost Institute has found that the rising prices for care are the chief driver of health care costs for privately insured Americans, according to the report. This leaves many hospitals looking for ways to save money. Business intelligence (BI), if used properly, can help hospitals get better deals on products they use the most.
BI can enhance the performance of hospital materials management if data is integrated at key points that link various supply chain functions, says Chip Bunata, VP of Advisory Services at VHA Inc., in an article in Healthcare IT News.
The four key supply chain functions Bunata identifies as potential areas that can be enhanced by BI are: supply data management; procurement; value analysis; and sourcing and contracting.
Here are four ways supply chain managers can integrate BI across these functions to cut costs and increase value:
- Using BI, supply chain leaders can benchmark larger percentages of their dollars and discover more ways to save money. “You can find out where cash flow is hiding within your supply data,” Bunata says.
- Using BI from their procurement processes, hospitals can help their value analysis teams understand the financial impacts of different product decisions. “This data supports ‘what if’ scenarios in evaluating conversion opportunities,” according to Bunata.
- Combine data management and sourcing to save the most money. “Price movements in the market are invisible without data,” Bunata notes.
- After hospitals have identified ways to save money, they should leverage scalable solutions to deliver results. “You’ll want to know exactly where to begin and where to end negotiations,” he says.
Hospitals that follow these steps can save money by finding preferred products and using bulk purchasing to get deeper discounts from their vendors.