Hospital supply chain leaders say the playbook that worked just a few years ago no longer holds.
Global economic instability, fragile supplier networks, pricing pressures and uneven clinical purchasing patterns inside hospitals are converging at the same time health systems are demanding greater savings from supply operations — leaving leaders to rethink how reliability, cost control and clinical alignment can coexist.
At Ventura, Calif.-based Community Memorial Healthcare, Michael Alfaro, director of materials management, said the most acute pressure comes from the intersection of forces both outside and inside the organization.
“The biggest challenge right now is the collision between macroeconomic volatility and internal clinical variation,” Mr. Alfaro said.
He pointed to tariffs, geopolitical instability and reimbursement uncertainty as structural cost drivers colliding with physician preference items that fall outside committed contracts. That combination, he said, can undermine market share strategies and prior value analysis work unless governance and physician alignment are tightly integrated.
At Tewksbury, Mass.-based Covenant Health, Eric Berger, system director of supply chain, described a different but equally persistent challenge: managing competing priorities across operations and contracting while trying to justify investment in supply chain expertise.
“The things that keep me up at night are the assorted competing priorities that impact the supply chain,” Mr. Berger said.
He said supply chain teams are balancing product availability and continuity alongside price increases — both on and off GPO contracts — while margins remain tight. Staffing teams with the right skill sets for analytics, utilization and technology is increasingly difficult, particularly when demonstrating ROI is an uphill battle.
“But that is a hard sell in organizations where the margin is tight and everyone is being asked to do more with less,” Mr. Berger said.
For some leaders, the biggest concern is no longer price alone, but reliability. Don Barton, chief technical officer and director of supply chain management at Shelbyville, Ind.-based Major Health Partners, said single-source dependencies and vendor instability have elevated sourcing risk to a clinical issue.
“The biggest supply chain challenge keeping me up at night right now is ensuring long-term dependability and reliability when selecting products,” Mr. Barton said.
In response, his team has shifted vendor selection criteria away from lowest cost and toward supply chain resilience, evaluating factors such as dual sourcing, geographic diversification and delivery performance. Contract structures are also evolving to include stronger safeguards against disruption.
At Little Rock, Ark.-based Baptist Health Medical Group, Lisa Farmer, corporate vice president of supply chain, said the deeper challenge lies in healthcare’s pricing and reimbursement structures themselves.
“For me, it’s beyond common supply chain issues like shortages, substitutes and inventory management,” Ms. Farmer said.
She questioned why product pricing often remains disconnected from reimbursement realities, pointing to uniform GPO pricing despite wide variation in state-level reimbursement and value delivered.
“All things I think we need to attempt to disrupt,” she said.
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