For the average health system with five hospitals or 650 beds, supply shortages increase the cost of care to $3.5 million, restrict up to $1 million in excess inventory and cause $350,000 in lost revenue, according to Premier.
To tap into industry trends, Premier surveyed about 100 healthcare and supply chain leaders in the spring. One respondent summarized the top three concerns for the next 12 months: "Sticky inflation, transportation concerns, labor shortages."
Other common disruptions include conflict in the Red Sea; a Panama Canal drought; geopolitical movements, including the Israel-Hamas and Russia-Ukraine wars and the U.S. presidential election; increased military activity in China; and cybersecurity threats.
Seven findings to know:
1. In 2024, 80% of healthcare provider leaders and 84% of suppliers expect supply chain challenges to worsen or remain the same over the next year. In 2023, 75% of providers answered the same.
2. More than 50% suppliers have experienced supply chain operations challenges because of geopolitical issues and severe weather events in 2023. Almost 85% said they expect regulatory policy changes to affect their 2024 supply chain strategies.
3. Providers and suppliers expect inflation will be their most significant challenge next year. Other top-ranking concerns include ongoing supply disruptions and increased labor costs.
4. Sixty-seven percent of U.S. healthcare leaders said their teams are spending more than 10 hours per week mitigating supply chain challenges and shortages — a decrease from 75% in 2023. One-third said this year they are spending more than 20 hours a week on these issues.
5. In the past 12 months, the top product disruptions were syringes, sterile water and various IV fluids, aortic balloon catheters and surgical tourniquets.
6. Resiliency is out of reach, 65% of respondents said, because of financial pressures.
7. In 2024, 62% of provider leaders are focused on SKU rationalization, 54% are leveraging supplier key performance indicators, and about 51% are improving supplier contract terms and conditions.