Supply chain leaders are increasingly making the case that their work belongs in the C-suite’s line of sight, and across interviews with Becker’s this year, they have been consistent about what executives should be watching.
The first is a single number. Asked which metric CEOs should track, supply chain leaders pointed to supply cost as a percentage of net patient revenue. Scott Meiser, vice president of supply chain at Pittsburgh-based Highmark Health, said the metric captures not just price management but usage. Others refined it: Rosa Costanzo of Miami-based Jackson Health System recommended pairing it with total supply cost per adjusted patient day. Michael Brown of Houston-based Texas Children’s Hospital argued for a case mix index-adjusted measure that weighs spending against the complexity of patient acuity and clinical variation.
The second is where that number is hardest to move. Physician preference items and specialty pharmaceuticals top the list of categories health system supply chain teams find hardest to manage, leaders told Becker’s this month. Those are also the categories rising fastest. Ryan Koos, senior vice president and chief supply chain officer at Phoenix-based Banner Health, said his system is seeing the fastest increases in pharmaceuticals, driven by specialty therapies like CAR-T and oncology drugs, while implants keep climbing with new technology and inflation.
Leaders also flagged costs that rarely make it onto an executive dashboard. Freight and IT are among the cost pressures proving hardest for hospitals to absorb this year, according to supply chain leaders.
Behind all of it are forces supply chain cannot control on its own. Leaders describe tariffs, geopolitical instability and reimbursement uncertainty as structural cost drivers colliding with physician preference items that fall outside committed contracts.
That is why many argue the function needs a formal role in enterprise decisions. At San Angelo, Texas-based Shannon Health, leaders are formalizing that shift through governance structures designed to embed supply chain into enterprisewide decision-making. As one leader put it, supply chain can no longer operate on the sidelines.
