Healthcare providers and suppliers used to have simple business relationships focused mostly on price and contracts. This way worked before but now healthcare is more complicated. They need to become true partners who share common goals beyond just cost. Jimmy Chung, M.D., Chief Medical Officer of Advantus Health Partners, says that relying on group purchasing organizations (GPOs) with prices that don’t change often makes things unstable. This does not work well for value-based care.
Building trust and transparency is important because it helps both sides share accurate information, plan together, and react quickly to problems in the supply chain. When providers and suppliers communicate well, medical offices can get needed supplies on time, reduce waste, and manage stock better. Without trust, communication breaks down, supplies may run out, costs go up, and patient care gets worse.
Clinic leaders and owners should know these problems to make plans that encourage trust and working together.
Improving teamwork between providers and suppliers needs plans on culture, systems, and tools. Here are important steps based on 2024 healthcare research and examples:
Trust starts when both sides share their goals and talk about daily work issues. Clear communication about stock needs, delivery times, prices, and contract rules stops confusion. Amy Platis, Program Director of Finance at Northwestern Medicine, says agreeing on data details like contracts and amounts on both sides is the first step for good cooperation.
Trust grows when both sides keep promises and solve problems steadily. Using measures to check performance and having regular reviews help keep both sides responsible. McKinsey’s six-step collaboration method says managing performance together and committing long-term are key for lasting partnerships.
Good technology supports transparency by making data sharing and monitoring in real time possible. Medical offices should work with suppliers to use systems that work well together and train staff who understand supply data.
Almost half of hospitals and health systems use cloud technology now for supply chain management, and more plan to in the future. Cloud systems for Enterprise Resource Planning (ERP) and Supply Chain Management (SCM) allow safe, quick sharing of data. This helps both sides match supply to demand and plan for any problems.
Political problems and global shortages make backup plans important. Providers and suppliers must find risks together, plan alternatives, and share scenario data so they can adjust fast if something unexpected happens.
Both sides should work on getting good, combined data. Accurate data helps predict needs and control inventory better, lowering waste and preventing shortages. A 2024 roundtable said poor data handling is one of the biggest challenges for cooperation.
Changing from simple buyer-seller deals to real partnerships helps healthcare groups align with value-based care goals—better patient results while controlling costs. Jimmy Chung says old buying methods make unstable situations and do not meet today’s healthcare needs.
Artificial intelligence and automatic workflows are important tools for improving trust and openness between providers and suppliers. These tools make communication, data work, and decisions faster and easier, helping operations run better and improving patient care.
AI can handle huge amounts of data to predict supply and demand changes, expect problems, and model risks. Generative AI can quickly create risk reports and suggest ways to solve problems during crises like pandemics or political issues. EY experts say AI helps planners act before problems happen, not just fix them after.
Automating buying and paying tasks cuts errors, speeds up invoice approvals, and shows finances clearly. For example, Northwestern Medicine used GHX ePay to change its payment department from a cost area to a profit-maker. This system handled 98% of payments digitally and raised yearly rebates by 133%, helping both providers and suppliers.
Axogen, a healthcare supplier for surgery products, cut their admin work by half and lowered how long it takes to get paid by 12-15% after automating buying and payment. Their Customer Care team spent less time ordering and more time checking and making orders better, which helped efficiency.
Cloud ERP platforms allow safe data sharing, real-time views of stock, and quick updates on order status. This cuts down mistakes and delays so teams can fix problems fast. Cloud systems also keep information the same for both sides, as Amy Platis at Northwestern Medicine points out.
Automatic workflows reduce manual data entry and keep records matched between providers and suppliers. Clean, steady data builds trust since both sides can count on shared reports for planning and predictions.
AI and automation can help meet rules by keeping clear records of transactions and supply chain work. This helps with audits, reports, and patient safety.
For those running healthcare offices in the U.S., these ideas and tools bring clear benefits that help both daily operations and patient care.
IT managers should focus on technologies that secure data sharing with suppliers. Administrators and owners need to build a culture that supports open talks and lasting partnerships.
Two examples show clear benefits of these ways of working:
Healthcare in the U.S. is facing bigger demands and more complex problems. Teams need to work closely to keep patient care going without interruptions. Clinic leaders, owners, and IT managers play important roles in making provider-supplier relationships open and based on shared goals.
Using new technologies like AI and automation helps supply chains work better, improves finances, and most of all helps patient care. Clear communication, trust, and mutual responsibility break down old barriers and create strong foundations. This helps healthcare groups handle current and future challenges.
Collaboration is essential as it ensures efficient delivery of supplies necessary for patient care, optimizes the supply chain by aligning demand with supply, and ultimately reduces resource waste, which benefits patient outcomes.
Strong partnerships lead to timely access to medical supplies, cost efficiency, better management of supply disruptions, and innovative solutions through shared knowledge, enhancing overall patient care.
Common challenges include data access and sharing issues, uneven adoption of technologies like AI and blockchain, and communication barriers among supply chain stakeholders.
Using technology, such as cloud ERP and SCM solutions, can enhance secure data sharing, enabling real-time communication and application of predictive analytics to address potential supply chain issues proactively.
Key strategies include establishing trust and transparency, aligning on common goals, investing in infrastructure and capabilities, and employing performance management systems for ongoing collaboration.
Automation streamlines processes from procurement to payment, reduces manual touchpoints, increases data accuracy, and enhances visibility, allowing providers and suppliers to operate more efficiently.
Effective data management is crucial for leveraging insights to improve decision-making, forecast demand accurately, and enhance risk management across the supply chain.
Digital transformation facilitates real-time communication, improves data accuracy, and supports advanced analytics to collaboratively tackle supply chain challenges, enhancing partner relationships.
Poor relationships can lead to inefficiencies, treatment delays due to lack of supplies, increased costs, and ultimately compromise the quality of patient care.
Case studies such as Northwestern Medicine and Axogen show that automation of payment processes strengthens relationships and improves operational efficiency, yielding significant financial and communicative benefits.
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