Hospital Supply Chain Integration and its Impact on Outcomes

Abstract

Collaboration among hospital supply chain organizations and their internal and external partners has taken many forms partially in response to significant increases in health care costs in the United States while the quality of care delivered has not significantly improved outcomes for patients. An increasingly important factor of this high-cost profile is the cost of supplies including medical/surgical supplies and implants which are the primary focus of this research. The development of new supply chain capabilities alongside internal cost control and process improvement efforts as well as collaborative efforts between hospitals and suppliers have, in many cases, led to incremental efficiencies. However, there has not been a broad study of integration of United States hospital supply chains with their partners, the resulting capabilities, the achievement of supply chain and financial performance outcomes. In a discussion of hospital performance, it is important to note that patient care is critical in decisions made about hospital cost management, thus it is understandable that a specific capability or performance element prioritized in one hospital may be prioritized differently in another. This research examines the relationship between integration capabilities with supply chain and financial performance. Outcomes from multiple studies of this research includes empirical support for a strong link between supply chain capabilities (Study 1) and supply chain performance and directional link between supply chain capabilities as well as supply chain performance and financial outcomes (Studies 2 and 3). Additionally, this research created a practitioner-oriented benchmarking resource intended to aid in the identification of capability/performance gaps and advantages.