Transportation services and the supply chain

The May digital issue of The Journal of Healthcare Contracting is available online at In the latest issue, Robert Handfield, Ph.D., shares research and insight gleaned from a survey of IDNs as well as in-depth interviews with executives and providers regarding transportation services and the supply chain.

Every day, a great many items — including laboratory specimens, pharmaceuticals, patient records and other medically critical and administrative materials — are transported between facilities of integrated delivery networks. Too often, contracting executives do not give this category of spend a second thought, as it is viewed as a non-strategic, low-volume spend category.  However, transportation not only has the potential for cost savings, but it is also strategic to the overall mission of patient care and safety.

Historically, many IDNs have focused their management efforts on clinical spending categories and in the process, have disregarded the area of purchased services, which constitutes over 30 percent of total spend. Approximately 85 percent of functions showed a fragmented approach to transportation, with some ad hoc combination of internal and multiple third-party courier services. Decisions are often made at the department level, with little consideration to evaluating the IDN’s overall approach to transportation. Perhaps most significantly, almost all of the IDNs surveyed (87 percent) have never performed a formal insource/outsource analysis of transportation. This mixed picture suggests many IDNs lack a well-developed, formal strategy around transportation.

Think services are low-impact, low-value? If so, you may be missing opportunities for savings, efficiencies, improved customer service and better patient care. Click here to read the article

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