Dive Brief:
- Ascension is teaming up with Australia-based Ramsay Health Care to create a global supply chain company.
- A key goal is reducing supply costs through combined purchasing power. Ascension is the world’s largest Catholic health system, with 151 U.S. hospitals. Ramsay operates 230 facilities in six countries on four continents.
- “We believe our providers, and any providers, want products at high quality and lower cost,” Ascension CEO Anthony Tersigni, told Modern Healthcare. “This gives us visibility into product offerings around the world, and patients will benefit from this greater awareness.”
Dive Insight:
Supply chains are a critical factor in costs and operation. In most industries, supply chain managers will seek savings when revenues fall through procurement and other efficiencies. That’s not the case in healthcare, where substituting products or letting inventory get low could harm patients.
But in some cases, antiquated inventory management systems are causing just that result. A recent Cardinal Health survey found supply chain issues are causing hospitals to cancel and delay procedures because they lack critical supplies. Roughly a quarter of respondents were aware of an expired product being used on a patient or a patient being harmed because of lack of supplies.
The Ascension-Ramsay venture could spur other health systems to think outside the box to improve inventory control and reduce supply chain costs.
“We believe that over the next few years, we will create opportunities to both improve financial and operating performance within our respective organizations, as well as providing an alternative supply chain source for independent providers in North America, Asia, Oceania, and Europe,” John Doyle, executive vice president of Ascension and president and CEO of Ascension Holdings International, said in a statement.
The companies are already exploring ways to improve the technology platform for ordering, tracking, logistics and distribution. The global reach of the new initiative reflects hospitals' and health systems' growing interest in conducting business in other countries, particularly China.
The move comes as Amazon is said to be gearing up as a major player in the hospital supply chain business. The e-commerce giant is reportedly piloting with a major Midwestern health system using Amazon Business to fulfill supplies for about 150 outpatient facilities. The Wall Street Journal first reported the news in February. Amazon Business, its business-to-business marketplace, already sells medical supplies and IT equipment to hospitals, integrated delivery systems and doctor offices.