Hospitals overspending by billions on supply chain expenses, study finds

Hospitals are overspending by $25.7 billion on supply chain expenses annually, a Navigant analysis of 2,127 hospitals found. 

The study, which compared the 25 most efficient healthcare supply chain operators to other hospitals, found unnecessary spending rose 1 percent from $25.4 billion in 2018, despite significant efforts by health systems to rein in supply chain expenses. 

"Our analysis does not point to aggregate improvement in hospital supply chain performance, with high-performing supply chains widening the gap as others tread water or lose ground," said Rob Austin, director of Navigant. 

Individual facilities could save about $12.1 million on supply chain products, processes and procedures annually by using the right data and reducing supply variation. This is equivalent to the average annual salaries of 165 registered nurses or 50 primary care physicians, according to the study.

The study also found that lower supply chain spending does not translate to lower care quality.

Read more on the analysis here

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