Hospital supply chain leaders increasingly describe a job that looks less like procurement and more like enterprise finance, clinical strategy and quality oversight rolled into one function.
For Luke Martin, administrative director of supply chain management at Shannon Health in San Angelo, Texas, that shift shows up in the capital budgeting process. He said this includes facilitating capital budget preparation and ultimately presenting final numbers to the system’s CFO, a responsibility that traditionally sits with finance departments.
Les Feka, director of supply chain at Birmingham, Ala.-based Baptist Health Princeton Hospital, pointed to a broader set of financial and clinical functions his team has absorbed over the last several years. His team now factors total cost of ownership, including installation and extended warranties, into purchasing decisions and weighs those costs against Medicare reimbursement trends to gauge the full financial impact on the facility.
“This approach lends itself to supporting more in depth clinical value analysis processes as well as supporting standardization efforts to help manage costs,” he said.
Mr. Feka’s team has also taken on functions historically tied to quality and clinical operations. Supply automation now supports product usage tracking, giving supply chain a clearer read on the true cost of delivering a service, information that can strengthen a facility’s position in insurance reimbursement negotiations. His team also manages recalls electronically, a shift he said makes notifications more comprehensive and timely and keeps patient safety at the center of the process. Where staffing allows, supply chain analysts on his team handle surgical preference card management, a task that frees up nursing time.
“Our overall job now is to help the hospital be proactive in managing costs vs being reactive to changes in market conditions,” Mr. Feka said.
The pattern lines up with what other supply chain executives have described as the field’s broader trajectory. Michael Alfaro, director of materials management at Ventura, Calif.-based Community Memorial Healthcare, has said the scope of the role is expanding beyond traditional supply chain work into a broader, enterprisewide resource management role built on centralized frameworks developed with clinical and operational partners. Nicholas Trzeciak, vice president of supply chain operations at Palo Alto, Calif.-based Stanford Healthcare, has made a similar case for revenue cycle work, arguing that supply chain leaders sit at the center of many hospital processes and are well positioned to apply that experience to functions such as revenue cycle and other previously siloed workflows.
Mr. Martin has also framed the shift in financial terms beyond capital budgeting, saying supply chain teams are expanding their focus beyond traditional categories toward non-labor expense management to support systemwide financial goals.
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