Part 1: What is direct sourcing and how can it impact your hospital value analysis team?
Hospital value analysis teams have tremendous impact upon the patient experience, the clinical acceptance of products and the hospital bottom line. Accessing the marketplace for acquisition of high quality, customized hospital products while achieving 20 – 50 percent savings at the same time is easier than you think. But you need a partner with proven capabilities to help successfully convert products from legacy distributors and their markups into your own control.
ASP Director of Value Analysis Bethany Gleim, is contributing a five part, step-by-step, series for hospital value analysis professionals in Healthcare Purchasing News on the what, why and how VATs can add direct sourcing to their value-based purchasing arsenal. [Read Part 1]
Direct sourcing describes the practice of acquiring thousands of common hospital products directly from manufacturers. Today, whether you realize it or not, 50% of the commodities used in a hospital are not actually made by the company whose brand name is on the product. By leveraging direct sourcing and going directly to the factories, value analysis teams can play a role in developing clinically superior instead of clinically acceptable products while significantly reducing cost at the same time. VAT teams can choose customization and a long list of options for thousands of products compared to your legacy distributors’ list (not to mention eliminating the associated 20-50% markups on price). You can also make a measurable, positive contribution to improvements in the patient experience, patient communication and HCAHPS scores.
In short, you can get clinically superior products at the lowest possible price while also enhancing the patient experience by incorporating direct sourcing into your VAT strategy.
Does your distributor provide exactly what you need or want in the product? Or would you rather tell the person actually making the item what you are trying to communicate to the patient so that they can understand exactly what it means to you including how it needs to look and feel?
“Our patient amenity and branded items are going to determine, at least in part, how we are perceived and measured including our HCAHPS scores,” [said Jim Connor, VP of Supply Chain for Westchester Medical Center Health Network]. “We are using direct sourcing to ensure the quality of those products are high while keeping costs low.”
Related case study: “Global sourcing brings next level savings and quality improvements for Westchester Medical’s hospital supply chain.”
If you are interested in learning more about how your hospital value analysis team can put global sourcing to work for you, contact us at firstname.lastname@example.org.