Hospitals in the U.S. Are Facing Serious

Hospitals in the U.S. are facing serious financial crunch but fail to understand that they are save significant costs by better managing the supply chain. It is strange that while other organizations are very well aware of the role of supply chain in costs, hospitals remain blissfully unaware. As the result of this, the hospitals are faced with serious financial challenges and the costs cannot be effectively borne by the state as they tend to burden state resources too.

The authors have thus focused on the management of supply chain to see how this one method can bring down the costs. By paying more attention to reduction of costs for supplies, hospitals can effectively reduce the financial burden they face each year but the fact remains that the sheer lack of understanding about role of supplies and collaboration among key players continue to put supply chain management in the background where it remains permanently ignored.

Jonathan Ketchum has found that gain sharing can be one way to bring down the cost of supplies. He is the assistant professor at the School of Health management and Policy and in his research on the subject of cost of supplies; he has found that hospitals tend to ignore the cost of supplies because they buy whatever is offered to them right off the shelf. They cannot order customized items for which they could have bargained for lower prices.

But since they purchase finished goods, they are oblivious to how they can bring down the cost of supplies. Ketchum is hence studying the role of gain sharing in bringing down costs. He believes that if hospitals reward doctors for their role in reducing cost of supplies by sharing profits from money saved, then doctors would want to find ways to bring down costs.

This would encourage doctors to look for ways to control costs and one such way can be to join a consortium where physicians would agree on which supplies to use and on standardizing various supplies. For example they can decide if they would use the more expensive supplies or the cheaper ones that tend to do the same job at lower price.

The standardization would help in bringing down costs as doctors would know which supplies to use for which procedure and they would all agree on similar supplies instead of just randomly placing orders for whatever is available. The article shows that supply chain management is very important for more efficient use of funds in hospitals across the U.S. I believe that instead of depending on gain sharing, the doctors should join the consortium in standardizing products and then deciding on which supplies would be used in more expensive procedures.

Hospitals should then speak with suppliers to see who would offer the best price instead of just randomly buying from anyone at any price. They should insist on cheaper prices and if standardization is in place then they do not need to worry about supplies not functioning or doing their job properly. Gain sharing is a good idea but may take a long time to implement. On the other hand more well-known techniques of supply chain management must be.