Top 10 Ways to Cut Medical-Surgical Supply Spending Now

GHX releases list of documented opportunities for healthcare providers to reduce supply costs as AHRMM14 conference opens in Orlando
Louisville, CO and Orlando, FL — Monday, August 4, 2014

Faced with significant medical supply costs and shrinking reimbursements, healthcare providers need to reduce their supply chain expenses immediately—and GHX is providing a list of what it recommends as the top 10 ways to do it. The healthcare supply chain company released its list at the AHRMM14 Conference and Exhibition in Orlando, where it will focus on documented opportunities for cutting the second highest and fastest-growing operating expense for providers. Many of the listed opportunities are designed to provide the kind of visibility necessary for organizations to meet new reporting requirements for the cost and quality of care they provide.

The GHX Top 10:

  1. Understand the total cost of ownership of your supply chain;in addition to the price paid, consider the financial implications of procurement, logistics, inventory management, charge capture and reimbursement, among others.
  2. Develop data governance policies and synchronize product data with suppliers (using global industry data standards as much as possible) to help ensure that your item master is up-to-date and can be used as the “one source of truth”to feed clinical and financial IT systems.
  3. Reduce manual invoice reconciliation by having line level PO-to-invoice match on implant purchase orders.
  4. Streamline electronic medical record (EMR) system roll-out and maintenance by using up-to-date, clean, accurate data.
  5. Save an average $12.00-$27.00 per order by improving data synchronization and conducting as much of your purchasing electronically with as many of your trading partners as possible.
  6. Improve contract effectiveness by loading group purchasing organization (GPO) and local contracts into your purchasing system and validating price at the point of purchase order creation. You can save an estimated 1-3 percent in avoided overpayments by validating contract pricing and using the most up-to-date contract information.
  7. Centralize purchasing across your organization to provide visibility into and control over as much of your supply spend as possible.
  8. Create visibility into both the total cost and efficacy of the products being used in patient care, so that you can determine the role supplies play in improving cost, quality and financial outcomes (e.g., reimbursement).
  9. Focus on bringing more non-file and off-contract spend under contract, especially high-cost implantable device items;but don’t forget other spend, such as products purchased by facilities and engineering that have an impact on the environment of care.
  10. Collaborate with your trading partners to achieve mutual benefits. Share insights into what happens to products once they arrive at your facility and ask your suppliers for insights into how you can become a lower-cost customer to serve.


AHRMM14 attendees are invited to visit GHX booth 811 during exhibit hours to sign up for a complimentary Item Master and Supply Chain Data assessment and get a white paper entitled “Procurement Optimization: A Holistic Approach.”GHX and its customers will deliver 20-minute presentations focused on transforming the healthcare supply chain for increased efficiency, lower costs and, ultimately, better patient care.

About GHX
Global Healthcare Exchange, LLC (GHX) is driving costs out of healthcare by transforming the healthcare supply chain. Working with providers and suppliers, GHX is accelerating change by providing a faster, more efficient and collaborative supply chain that will take billions of dollars out of the cost of healthcare. For more information, visit www.ghx.com and The Healthcare Hub.