How to Improve the Healthcare Procurement Process with Data-Driven Procurement Strategies 

Improving the Healthcare Procurement Process: Ask the Expert

Tom Swapp, Vice President of Market Development – Acute for Direct Supply® DSSI™, discusses his history with this healthcare procurement challenge, as well as the ways in which he sees the industry solving this problem in the future. 

DSSI: How did your career path lead you to DSSI and to healthcare procurement?

Tom Swapp: I spent an early portion of my career consulting on physician preference items in acute care, one of the largest areas of spend for most hospitals. One thing I noticed early on was that the data hospitals were working with was very confusing and it was never very clean. We spent untold hours trying to clean up the data in order to draw conclusions and levy that to make better decisions going forward. Even then, I realized that if there was a way to have cleaner data, it would result in huge time savings for the hospitals and lead to better decision-making in healthcare procurement strategies. 

DSSI: But grappling with that data led to your next move?

Tom: After that focus on PPI, I translated what I had learned in consulting to the hospital side of things in Denver, focused on procurement and strategic sourcing. With a team of 25+, I experienced first-hand the manual pain of processing requisitions, purchase orders and the resulting reconciliation with AP. There is such a lack of transparency and collaboration between suppliers and providers when it comes to the transaction side of the supply chain.

DSSI: Where did you go from there?

Tom: My next opportunity was on the GPO side, where I went to work for a leader in the space and oversaw a healthcare procurement consulting team focused on helping hospitals save money. But once again, that lack of easily accessible, clean data made it hard to see and implement the savings opportunities we knew were there.

Healthcare Procurement Process Pain Point: A Lack of Clean Data

Throughout Tom’s career, the main procurement process pain point and healthcare supply chain challenge was clean data. DSSI has the power to help create a streamlined procurement process with actionable data.

“…that lack of easily accessible, clean data made it hard to see and implement the savings opportunities we knew were there.”

Three Pillars in the Healthcare Procurement Process

In the healthcare procurement process, the healthcare supply chain can be split into three pillars. Of those three pillars, logistics and sourcing hinge heavily on procurement. Sound management of the item and the vendor master completely dictates data integrity. 

1. Logistics (Distributors)
2. Sourcing (GPOs)
3. Procurement (ERPS)

The foundation that delivers real savings and real outcomes is procurement. You can’t have an effective sourcing strategy without really sound procurement principles. Likewise, you can’t have a good distribution strategy without great procurement. Additionally, procurement is often overlooked and the data to drive it is difficult to extract, and often pulled from an ERP that is not built to optimize for the supply chain.

Optimizing ERPs in the Healthcare Procurement Process

Not all ERP systems are optimized for supply chain and strategically built for procurement sourcing. When trying to extract data from them, item and vendor masters can be messy as nothing is built in collaboration with the supplier community to allow for greater visibility and coordination. Optimizing and strategically shaping ERPs in healthcare procurement strategies can bring a lot to the table for process improvement.

Successful procurement strategies are the byproduct of an organization mastering their contracts. The contract should dictate the procurement terms and flow and overall, the entire healthcare procurement strategy. To optimize ERPs in the process, a supply chain ERP would be a contract visualization and compliance engine for a Health System’s contracts, both local and GPO. However, most ERPs don’t contain a rules engine that can be smart enough to drive procurement in a smart manner.

AI in the Healthcare Procurement Process

Artificial intelligence (AI) in healthcare procurement provides another advantage to data-driven healthcare procurement strategies. AI and machine learning can drive savings in the healthcare procurement process with automated alerts and recommendations. Discover why AI matters in healthcare in conjunction with your healthcare procurement strategy.

Improving the Healthcare Procurement Process with DSSI

Clean and actionable data can lead to procurement process improvement and a streamlined overall healthcare procurement strategy. When healthcare organizations optimize their spend and can effectively utilize their ERPs, they can unlock true supply chain savings.

Thanks to DSSI’s patented OGM (order guide manager) solution, and DSSI Analyze, for the first time ever, healthcare organizations can do just that. See for yourself how DSSI builds an optimized healthcare procurement process that revolutionizes the way organizations make procurement a strategic priority.