Navigating Uncharted Waters of Supply Utilization Management

Traditionally, the Healthcare Supply Chain saving game has been greatly influenced by the “price” savings opportunities offered by group purchasing contracts, standardization, and capitation. Unfortunately, we are not seeing the ROIs from these major savings sources that we once experienced. In addition, the Affordable Care Act’s 2.3% medical device tax on healthcare device manufacturers took effect in January 2013, thereby creating even greater pressure on price savings. The future is crystal clear for value analysis professionals; we won’t be able to hold the line on price savings. Therefore, we will need to move into uncharted waters for new and even better savings sources.

The good news is that with any new challenge there are always new opportunities that have been either ignored or undervalued and can now be tapped into to reinvigorate your savings prospects. One such new source of savings is Supply Utilization Management, which is a new discipline that has been experimented on by some value analysis practitioners but has not been integrated into most healthcare organizations’ value methodology. That’s why these are still uncharted waters for countless value analysis professionals who do not realize the huge return-on-investment possible by embracing this concept head on. Let’s face it, we have nowhere left to go for big savings, but Supply Utilization Management.

Robert W. Yokl can be reached by phone (800-220-4271) or by e-mail at with your questions, comments or counter-points to his editorials. Or, anything else that peaks your interest in this issue.