The Future is Now: Two Simple Steps to Prepare Your Hospital Supply Chain and Cost Management for AI

More than ever, healthcare supply chain teams need smarter, automated technology to transact and manage supply costs and risks. The COVID-19 pandemic has further exposed us to inflation, product shortages, inaccurate analytics, and shortages of skilled supply chain workers. Hospitals must begin to embrace the right combination of planning and technology to improve the supply chain and bring costs under control.


A significant part of the solution may be artificial intelligence (AI) technology. The AI buzz is gaining traction in the healthcare industry…but it has to be more useful than some earlier attempts to incorporate it into supply chain management. How can we begin the journey to leverage the latest advances in artificial intelligence and avoid the pitfalls of past AI trials that categorized “Frozen Chicken Breasts” as “Breast Implants?” Let’s look first at some of the obstacles we must overcome before exploring and implementing AI-based solutions.


Challenges are Holding Back Healthcare Supply Chain Transformation


For decades, the healthcare industry has used the “dirty data” excuse to maintain its supply chain status quo. Meanwhile, other industries have been transformed due to supply chain advances championed by companies such as Amazon, Tesla, and Google. Now healthcare needs to get on the bandwagon. But first, we must solve some very real problems, both at the local level and industry-wide, such as:


  • A lack of industry-wide standards for medical product data that can be easily consumed and managed at a hospital or hospital network level
  • Different user requirements of product information and types of metadata such as classifications within the integrated ERP, EHR, and financial systems of hospitals or IDNs
  • Hidden products spend not captured on Preference Cards and with point-of-use technology, leaving large transparency holes of 20 to 30 percent or more   
  • No integration with a comprehensive contract management and price system
  • Unavailable curated view of information for business intelligence and local data warehouses necessary to drive decision support and service line analytics to the next level
  • An enormous amount of unorganized and disparate medical product data challenging data scientists trying to eliminate false positives via models such as a managed machine learning approach

Take Two Specific Steps Now


Tackling and resolving these issues won’t happen overnight; hopefully, your hospital or health system is already participating in and advocating for more standardization and system integration. In the meantime, there are two initiatives you can undertake immediately to prepare for the benefits of AI:


Close all the gaps in your internal data collection and management processes and “lock down” the products utilized in patient care. Manage contract management information, pricing, accounting activity codes, inventory levels, supply chain classifications, and many other data elements more proactively, as this data will feed into advanced artificial intelligence analytics, automation, and integrated “smart agents” of the future.  

Build partnerships with healthcare data companies that understand the challenges of developing AI that can interpret enormous volumes of spend and product data. Working together, you can help them develop AI models that can limit false results, as they infuse their knowledge and proprietary metadata to meet the business requirements of different end-users within your facility or system.   


Ideally, more advanced uses of AI technology in healthcare supply chain management will increase accuracy while making it easier for you to pivot when necessary. In addition, it will allow you to better track and analyze all of the data. If you’re adequately prepared, AI will recognize irregularities and create projections that upgrade your supply chain operations. 


Seek Lasting Partnerships to Help Close Those Gaps


So as you work to close the transparency gaps in your cost cycle, look for technology and consulting partners who can help you build towards an AI automation future. You need the right information and resources from knowledgeable, experienced and forward-looking partners to be able to rapidly deploy and use AI products.


Former IBM Executive Chairman, CEO and President Ginni Rometty said, “Some people call this artificial intelligence, but the reality is this technology will enhance us. So instead of artificial intelligence, I think we'll augment our intelligence.” Yes, AI will augment our intelligence…only if it’s applied correctly to the specific challenges of the healthcare supply chain. Let’s collaborate to make that promise a reality!

Share :

Popular Blog Posts