3 Ways Hospitals Can Fine Tune Logistics as Healthcare Spending Rises

Healthcare, Lean Guiding Principles, Supply Chain
September 9, 2015

Lean Healthcare White PaperSpending is growing across the U.S. healthcare system. For hospitals, networks, and healthcare providers – and the transportation and logistics companies that serve them – the right systems and solutions can help ensure logistics keeps pace with forecast growth.

Health-related spending has accelerated, according to federal statistics cited in a Wall Street Journal article. The nation’s current $2.9 trillion healthcare industry saw spending rise 5.5% in 2014 from 2013; it’s forecast to rise another 5.3% this year, the paper reported. Through 2024, forecasts peg growth averaging 5.5%. Prescription drug spending is expected to rise even faster.

Why the climb? The strengthening economy, the Affordable Care Act (ACA) expanding insurance coverage to millions of Americans, and Baby Boomers aging to Medicare status all have fueled spending growth. By 2024, Medicare should have 70.3 million enrollees. Medicaid should have 78.1 million enrollees.

Such growth could challenge logistics operations for the entire healthcare industry. More costs make for a pricey proposition. A quarter of annual operating expenses often are spent on supply chain-related needs in many organizations, including those in the healthcare sector.

Below are three ways your healthcare organization can ensure logistics are up to the challenge:

  • Think LEAN. According to an industryweek.com article, to date, only 4% of healthcare companies have fully implemented LEAN. With the ACA mandating improved patient care and reduced costs, introducing LEAN culture and efficiency to the supply chain can help providers meet both challenges.
  • Address overall processes. In the white paper, “Eliminating Waste in Healthcare Supply Chains,” Ryder examined how the seven types of waste and following the five principles of LEAN can boost patient outcomes. Enhancing organizational processes is a sound strategy, no matter the external cost drivers affecting the company.
  • Prepare now. Whether addressing LEAN and overall process improvement, or just staying informed about coming trends, prepare your organization today for higher healthcare spending and how that will impact your logistics operations. Partner with a 3PL versed in and equipped to handle healthcare logistics to ensure future changes don’t catch the organization off guard.

Click here to download a copy of the white paper, “Eliminating Waste in Healthcare Supply Chains.” To learn more about how process improvement can transform your operation, visit ryder.com/lean or call us at 1-888-887-9337.

 

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Authored by Chris DiBernardi

Chris DiBernardi is Director Product Development in the healthcare industry group for the Supply Chain Solutions (SCS) business segment of Ryder System, Inc. Chris has over 14 years of customer-facing experience in life science and healthcare supply chain. In his current role, Chris is responsible for market strategy and development, product development, and solutions sales support for healthcare.

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