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Hospitals And Integrated Delivery Networks

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Hospitals and Integrated Delivery Networks

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Co-authored by Jason Henry and Sharon Higgs

?2016. FedEx. All rights reserved.

Introduction

While adapting and complying with costly changes in regulations as well as increases in operating costs, hospitals have managed to remain profitable. This is due primarily through Medicare, Medicaid, and private insurance reimbursements for services rendered. However, new health care reform initiatives reduce percentage of these reimbursements, especially for hospital inpatient services. Less reimbursements coupled with costly phased rolled-out regulatory requirements is forcing some hospitals out of business.

To stay afloat, hospital executives are looking at the second largest expense after labor; supply chain management. Executives are examining their business models and recognizing the need to scrutinize supply chain management practices, which represents nearly half of its operating expense. Relying on Group Purchasing Organizations (GPOs) and third party providers (3PLs) to negotiate contracts with suppliers to manage supply chain order fulfillment and transportation.

This white paper focuses on how hospitals and Integrated Delivery Networks (IDNs) can manage their inbound supply chain to reduce unnecessary costs and increase efficiencies to significantly improve their profit margins.

Evolving Trends

Group Purchasing Organizations (GPOs) grew in popularity between

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