Providers and suppliers continue to look at the supply chain as the cornerstone for transforming their operations. One of their ongoing challenges in this area, however, is having the ability to fully understand the long- and short-terms risks and cost savings associated with those investments.
Healthcare supply leader, GHX has launched two new healthcare supply chain savings tickers that track actual and potential savings available to healthcare providers and suppliers. The new tickers are based on the recently announced GHX value calculation methodology, which includes more than 70 individual calculations and industry averages, evaluated by Forrester Consulting and conforming to its rigorous Total Economic ImpactTM (TEI) methodology. The two GHX healthcare savings tickers are available on the company’s website.
The new savings tickers are one of the first outcomes of the Forrester Consulting TEI™ Compliance Review. GHX commissioned the compliance review to help ensure that its ROI calculations meet the standards of Forrester’s rigorous cost and benefit analysis framework. The new calculation tickers provide a daily update on the savings being achieved by GHX solutions throughout the industry and the additional savings that can be achieved with greater supply chain automation.
“GHX customers are currently delivering well over $1 billion in savings annually to healthcare,” said Bruce Johnson, President and CEO, GHX. “We started tracking the savings our customers were delivering to their organizations and the industry back in 2010. Since then, we’ve tracked more than $6 billion in savings that can be put toward quality patient care instead of waste in business processes. But what our new tickers expose is how big the unrealized savings opportunity is – $2.8 billion per year. While the challenges facing healthcare are significant, there remains a tremendous opportunity to deliver even greater efficiency that can result in significant measureable savings.”
GHX Healthcare Supply Chain Calculator Overview
This unrealized savings number is also based on the GHX value calculation methodology evaluated by Forrester Consulting. GHX conservatively calculated the potential savings with two “what if” assumptions: What if GHX customers (1) were using the full suite of GHX integrated solutions, and (2) were employing those solutions at average – not even best-in-class – rates of utilization based on how existing GHX customers with those solutions are currently using them.
Supply chain efficiency measured by the new GHX ticker comes from:
– Transaction automation: savings accumulate as a greater percentage of supply chain transactions are conducted electronically thru EDI (Electronic Data Interchange) as opposed to manual, paper-based processes.
– Trading partner network: the higher the number of electronic trading partners, the greater the savings.
– Accurate transactional data: discrepancies and exceptions that arise from inaccurate pricing, catalog and contract data have a detrimental ripple effect across the supply chain. Minimizing and eliminating exceptions can drive substantial savings and yield visibility to key data for better decision making in a value-based environment.
– On-contract spend: confirming that negotiated contact pricing is actually reflected and propagated throughout transaction workflow is essential to driving supply chain value.
