By 2020, supply chain expenses will eclipse labor as the major cost in U.S. healthcare, according to SpendEdge, a global procurement advisory firm.
Here are four more of the firm's 2020 predictions:
1. Expect more hospital bankruptcies and closures. SpendEdge analysts expect that there will be more than 100 healthcare facility bankruptcies or shutdowns in the U.S. by the end of 2020. As a result of the financial struggles, consolidation is one of the emerging trends that will continue.
2. Expect blockchain to be more widely used. Four companies are participating in the FDA's pilot program that supports the US Drug Supply Chain Security Act, which calls for the development of an electronic, interoperable system by 2023 to track prescription drugs as they are distributed across the supply chain. Each company in the pilot program is creating a shared blockchain network that allows real-time monitoring of products. The networks are expected to improve inventory management and the amount of reliable information shared between organizations.
3. Expect profit margin deterioration. Hospital and health system margins will likely continue to deteriorate in 2020. Effective supply chain management may help offset some of these deteriorations, according to SpendEdge. The advisory firm suggests that in 2020, the US healthcare sector may work more closely with other hospitals and manufacturers in the region to gain buying power.
4. Expect supply chain efficiencies to improve. New technology, including cloud-based tools, will allow healthcare supply chain leaders to access and sort a lot of data on their own, saving the time of going through traditional IT departments.
Access the full report here.