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Modern Healthcare

Providers target supply chain cost savings amid uncertainty

Providers target supply chain cost savings amid uncertainty

Finance administrators at healthcare providers will continue to cut costs as they navigate the fiscal uncertainty wrought by COVID-19, according to a new survey from Bain & Company

  • June 12, 2020
  • min read

Modern Healthcare

Providers target supply chain cost savings amid uncertainty

Ninety-five percent of finance administrators said that their organizations were likely to roll out cost-saving initiatives, according to a mid- to late-May Bain & Company poll of 441 frontline healthcare workers. Equipment and supplies purchases were the primary target, followed by increasing physician awareness of costs and renegotiating contracts.

"Finance administrators are pulling hard on a set of procurement levers, whether that's on med-tech purchases, pharmaceuticals, supplies or physician-preference items," said Michael Brookshire, a partner with Bain & Co.'s healthcare practice and co-author of the report, adding that they are also looking at reducing hours, bonuses and hourly compensation for frontline staff, executives and administrative support teams. "The longer that providers are dealing with depressed volumes and revenues, the more they are trying to redesign their operating models."

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