Supply Chain Key to a Sustainable Health System: Someone Tell the C-Suite

Feb. 20, 2024

I recently reviewed the results of Optum’s survey1 of healthcare executives on the path to a more sustainable health system. While I don’t disagree with what they list as their top areas of importance - “improving health equity” and “data and analytics maturity”-- I do see a disconnect with their responses related to how to get there, including the potential contribution of the supply chain. In this month’s column, I take a supply chain lens to the survey results and offer some recommendations on where and how supply chain professionals can demonstrate their role in supporting the C-suite’s priorities.

Health Equity

Despite ranking #1 when asked what was needed for health system sustainability, the executives surveyed ranked “improving health equity” in the middle of the pack for investment priorities (#4 out of 9 options) and even lower when ranking top challenges (#15 out of 20) and listing areas that partnerships can support (#14 out of 19). The latter is particularly surprising given that numerous industry and academic organizations have promoted hospital and community partnerships as a key strategy to addressing health inequities. 

Further, it appears as if the leaders surveyed do not recognize and/or financially support the role of supply chain in addressing health disparities despite a longstanding effort by many of these leaders to direct more of their procurement spending to certified diverse vendors, especially those who hire local individuals from more disadvantaged communities. Hospital supply chain leaders also handle procurement of food and other social determinants of health and are increasingly helping to expand access to care in the communities where disparities are the greatest, which are both noted in the survey as key strategies. Unfortunately, investing in supply chain ranked lowest in funding priorities for those surveyed, which was mirrored in a recent GHX poll of supply chain leaders who said lack of funding, not interest, was the primary reason they were not able to do more to support health equity. 

Beyond reminding executives about the points made above, supply chain leaders can also speak to the role sourcing professionals play in addressing the unique needs of different patient populations. For example, as noted in recent studies on blood pulse oximeters, the color of a patient’s skin can impact performance. Supply chain can also support patient satisfaction by helping select personal grooming products for patient rooms that are more appropriate for racially and ethnically diverse patients. 

Data and Analytics Maturity

When it came to data and analytics, there was more alignment, with the executives listing it as their top investment priority. Those surveyed also spoke about the progress they believe they have made in preparing data to support the use of artificial intelligence and machine learning. Once again, given the low ranking for supply chain investments, I question if the executives fully appreciate the value of the data captured and managed by supply chain – data related to not only the purchase price of products, but also how and when they are used, on which types of patients and by which clinicians, and to what clinical and financial outcomes. This data is not only used for analysis on the cost and quality of care delivered, but it is also key to generating evidence on which products work best on which patient populations, and it helps physicians and value analysis professionals make better sourcing decisions. This is particularly striking, given reducing unnecessary care variation was ranked second among the activities being pursued by the executives to achieve value-based healthcare. 

In its commentary, Optum speaks to the value of standardizing claims and clinical data to give more support to the desire by providers and payors to offer more customized products and services. While not addressed specifically in the survey, the continued lack of executive support for the adoption of supply chain data standards also makes me question their understanding of the role of unique device identifiers for medical products, which can help standardize both the data captured in claims and medical records, and enable more comparative analytics.

Supply Chain Disruption

Finally, a note on supply chain disruption, given it was ranked as a top challenge by only 3 percent of the executives, and last among the areas where those responding believe partnerships are important.  To me, this clearly points to a lack of understanding among executives about how data sharing between providers and suppliers can improve demand generation and provide more advance notice to address potential and impending disruptions. The Healthcare Industry Resilience Collaborative (HIRC), created in response to the severe supply shortages during the pandemic, is a prime example of how providers and suppliers have partnered together to support more resiliency, which is fundamental to a truly sustainable healthcare system. 

1. C-suite Check-In: Building a Modern, Sustainable Health System.  Optum website.  Building a modern, sustainable health system (  Accessed January 19, 2024.