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Unnecessary hospital supply chain spending tops $25B

Hospitals are leaving billions on the table when it comes to the U.S. supply chain, according to a new study from Navigant that found unnecessary supply chain spending reached $25.7 billion a year.

That’s up $2.7 billion, or 11.8%, from 2017, according to Navigant, which analyzed 2,127 hospitals for its study. Individual hospitals have a bigger opportunity for savings, with the average annual supply expense reduction opportunity rising 22.6% from 2017, to $12.1 million. That’s about the same as the average annual salaries of 168 registered nurses or 51 primary care physicians, according to Navigant. $12.1 million is also equivalent to the cost of 3,100 knee implants.s

However, higher supply chain costs don’t mean higher quality care, just as savings on supply chain spending doesn’t equate to lower quality care.

“Our analysis does not point to aggregate improvement in hospital supply chain performance, with high-performing supply chains widening the gap as others tread water or lose ground,” Rob Austin, director at Guidehouse, which owns Navigant, said in a statement.

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