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Streamlining Procurement to Reduce Administrative Burden for Healthcare Providers




Providers aim to devote maximum time and resources directly towards quality care delivery in the high-stakes healthcare environment. However, cumbersome back-office tasks related to supply chain management consume bandwidth that pulls focus away from patients. Given intensifying margin pressures, there is urgency for hospitals and health systems to streamline repetitive procurement processes in order to boost efficiency systemwide.


The Problem of Provider Administrative Overload


In the high-stakes healthcare environment, providers aim to devote maximum time and resources directly towards quality care delivery. However, cumbersome back-office tasks related to supply chain management consume bandwidth that pulls focus away from patients. Given intensifying margin pressures, there is urgency for hospitals and health systems to streamline repetitive procurement processes in order to boost efficiency systemwide.


The Problem of Provider Administrative Overload


Industry studies indicate clinicians spend nearly twice as many hours per week on administration compared to direct patient care. For nursing roles, up to 25% of a shift can involve documentation versus hands-on treatment. Physicians lament spending more time interfacing with computers than patients. This imbalance contributes to clinician burnout while also inflating organizational costs.


On the supply chain side, factors driving excessive administrative workload include:


  • Managing inbound requests from various departments

  • Fielding special purchase order inquiries

  • Gathering backup item specifications & pricing

  • Obtaining necessary request approvals

  • Onboarding new vendors, including credentialing

  • Entering orders across disparate systems

  • Monitoring deliveries for accuracy

  • Managing invoices, including resolving disputes

  • Reporting for budgeting needs


Considering a typical health system processes thousands of purchase transactions each week, it is easy to see how procurement tasks devour staff hours. Yet this elaborate sourcing sequence yields little direct patient benefit.


The Costs of Supply Chain Inefficiency


Inefficient processes that require manual intervention are estimated to add 20-30% overhead to supply costs as well as increase clinician frustration - a lose-lose scenario. Bloated back-office budgets diminish what hospitals can invest toward advanced care programs and the latest medical innovations.


At the same time, ordering hassles and product access delays sour provider sentiment toward the supply chain organization. Without reliable support services, clinicians cannot work at full potential which compromises broader organizational objectives around care quality and growth.


Opportunities to Streamline


Transitioning labor-intensive paper-based operations to optimized digital workflows is imperative for overburdened hospitals looking to trim waste. The key pillars of supply chain automation that directly alleviate administrative load include:


Purchasing - Online catalogs, e-procurement apps, and purchase card integrations reduce manual requisitions and PO processing steps. Staff spend less time fielding requests, gathering specs, obtaining approvals, sourcing items, and entering orders.


Receiving & Put-Away - barcode scanning, robots, and sensor-based systems validate deliveries and handle stocking rapidly so workers avoid hours of marking receipts and put-away activities.


Inventory & Replenishment - smart cabinets and real-time inventory tracking feed constant visibility down to the item level across facilities while AI engines autonomously trigger refill orders. This curbs ad hoc stock audits and urgent shortage requests which drain worker time.


Reporting & Payments - Once source transactions are digitized, data analytics offer real-time pipeline insights. What once required intensive month-end report building is now viewable instantly over digital dashboards. Meanwhile, ePayments issue and reconcile automatically based on receipt and order rules to prevent invoice bottlenecks.


Enlisting these complementary digital innovations reorients procurement staff towards more strategic initiatives like demand management, supplier evaluations, and system enhancements. Day-to-day transactional activities become streamlined and shift from manual to automated. Added benefits are elimination of paperwork, minimized stockouts, improved regulatory adherence, and optimized item utilization.


Another avenue to leverage industry scale for efficiency is joining a Group Purchasing Organization (GPO). GPO staff manage contract negotiations and vendor credentialing so individual hospitals avoid consuming effort here. Shared best practices further prevent hospitals from each independently navigating new regulations or technologies. By tapping collective GPO resources, providers offset tactical workload traditionally handled facility-by-facility.


Alleviating Administrative Burden with Shared Services


Given limited budgets, not every hospital can afford a sweeping digital overhaul. An alternative or interim option is migrating transactional supply chain workflows to third-party shared services centers. These outsourcing partners provide anything from basic order placement/tracking up through consultative services like item utilization analysis – essentially becoming an extension of the internal supply chain organization. Routine tasks shift to dedicated shared staff with specialized healthcare expertise and the latest productivity-enhancing technologies. The provider organization thus frees up resources to direct towards initiatives advancing system strategy and competitive positioning rather than commodity management duties.


By judiciously tapping outsourcing, technology, and GPO collaboration to jettison administrative clutter, hospitals create opportunities to redirect that recovered time, money, and focus back into patient care where the impact matters most.




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