Within the last two years, the healthcare industry saw an influx of in-patient care as COVID-19 swept through communities across the United States.

The widespread shortage of personal protective equipment (PPE) and technology at the beginning of the pandemic led to exponential health expenditures to boost the availability of essential supplies.

In response to the medical supply-demand, federal government spending increased by 36% in 2020, with national healthcare spending projected to rise another $6.2 trillion by 2028.

Yet, despite increasing budget allocations, a recent analysis found that 30% of medical facilities still struggle to obtain enough supplies with each new variant of the virus. Inadequate supplies coupled with inflation have shed even more light on the supply chain’s role in saving lives.

The healthcare supply chain delivers essential resources, supplies, technologies and other goods through various regulatory agencies — from product manufacturers to insurance companies to care facilities. This makes it a complex but critical component of the medical industry’s ability to provide optimal patient care. Here are three crucial ways supply chain management in healthcare saves lives.


Reduces hospital facility costs

Even though the federal government has expanded healthcare spending, U.S. hospitals faced a $54 billion loss in net income in 2021. Consequently, hospitals have eagerly searched for ways to cut budgets across the healthcare ecosystem, turning their attention from billing and services to supply chain management.

Due to hospital budget constraints, supply chain leaders have also had to reduce costs. Thankfully, real-time data has helped the supply chain alter payment models while bolstering its profits.

Comprehensive hospital system data provides access to current inventory, future demand, and excessive purchasing and waste trends. The supply chain reads the data to understand where to reduce prices, refine its role in the medical field and mitigate end-to-end supply chain disruptions.   Hospitals can then funnel additional resources toward patient care and other medical services with more supply savings. 

Supports distribution of medicine

According to the U.S. Centers for Disease Control and Prevention, distributors have given out over 750 million COVID-19 vaccines throughout the United States. The number of Americans fully vaccinated continues to increase.

When considering the full scope of COVID-19 inoculations, the supply chain is critical in delivering access to vaccines.

The healthcare supply chain begins with manufacturing medical items — syringes, gloves, masks, technology, medications, etc. — and transporting them to distribution centers. Once authorized, the products eventually work their way to hospitals, private practices, drug stores and patients.

Without supply chain management supporting COVID-19 vaccine distribution, the virus would continue to spread with higher death tolls.


Digitalization for optimal patient care

Digital solutions have optimized the supply chain in several ways. As previously mentioned, multiple data insights help analyze the supply chain process and lower hospital expenses.

Cloud-based systems, in particular, connect healthcare facilities to supply chain software, allowing the medical field to automate inventory management. The software further reduces the time spent on processes traditionally done by hand, fostering more outstanding patient care.


Advanced technology also helps the supply chain save lives in the following ways:

  • Enables providers to be more patient-focused by reducing human error
  • Leverages data to forecast and track the need for medication or supplies, such as during influenza season
  • Boosts patient satisfaction with immediate access to medical aid
  • Better manages supply procurement and overall spending
  • Improving Supply Chain Management in Healthcare
  • Research has made strides to streamline supply chain management in the medical field. However, there is ample room to improve various processes for more satisfactory performance.

For starters, medical facilities should evaluate their suppliers and aim to facilitate more concise communication. Likewise, suppliers must demonstrate responsiveness and reliability to meet supply chain needs further.

Organizations must also analyze whether their supply chain strategy is cost-effective and resilient in times of crisis. The COVID-19 pandemic is a prime example of a worst-case scenario for supply chain disruptions. Developing a primary and secondary suppliers network can enhance protection during uncertain times.

Diminishing data silos — when one person or group maintains data required across a web of groups — can help reduce over-purchasing stock. Additionally, ongoing supply chain management monitoring helps identify issues like late product shipments, poor quality and unfulfilled orders.


Better patient care 

Medical workers can save more lives in healthcare settings as supply chain management systems become more efficient. Between the enduring availability of necessary supplies and optimized processes, providers can again focus on providing the best patient care possible.