Relentless Health Value

You know what the second biggest cost line item is on most health systems’ profit and loss report: supplies—buying things like artificial knees, stents, service contracts. It’s estimated that an average hospital can save more than $12 million a year if they manage their supply chain better. And interestingly, oftentimes care actually improves as a result. For context, that wasted $12 million could pay for 165 more nurses or 50 more PCPs. It’s the cost of 3100 knee replacements. (All this, by the way, is according to Navigant.) Does it bother you that so many people in this country can’t afford care and nurses and PCPs aren’t getting raises and some of it is because leadership at many hospitals is not adequately managing their costs of goods? Maybe I’m an idealist, but the human consequences of this inadequacy certainly bother me. In this health care podcast, I am talking with Rob Austin. Rob is director of health systems at Guidehouse. He works a ton on supply chains at hospitals, health systems, and physicia