To the public eye, efforts at driving down healthcare costs seem to focus primarily on reducing unnecessary care, duplicative tests or hospital readmissions. But a peek behind the scenes makes clear that another huge cost driver is poorly managed or inefficient supply chain operations.

GHX is a health services collaborative now co-owned by 20 organizations representing manufacturers, distributors, hospitals and group purchasing organizations, launched back in 2000. According to Teran Andes, executive director of exchange services for GHX, its founders saw "a tremendous opportunity to increase automation and build (supply chain) visibility and transparency with the goal of helping organizations provide better healthcare."

That opportunity has only increased as new technologies have become available that can help give stakeholders a clearer and tighter grasp on their supply chains. According to Andes the benefits of IT accrue to healthcare stakeholders from three different angles:

• Basic operations. The most straightforward benefits, Andes said, revolve around the fact that IT helps any attempts at automation. For example, not so long ago, when paper was king, ordering pretty much anything involved filling out and faxing a paper purchase order, then waiting a varying amount of time for a response. Now, everything is done electronically, and supply managers can manage their inventories much more closely.
• Consolidations. For the last several years, there's been a steady parade of healthcare organization consolidations, and all indications are that trend is going to continue. From a supply chain perspective, that can amount to several very different systems being asked to work together, a request with which a system dominated by paper would be hard pressed to comply. According to Andes, however, IT developments have enabled his organization to provide "a single pane of glass" through which managers can scrutinize and compare different supply chain models, thus minimizing the limitations that come with data that stays in different silos.
• Analytics. In similar fashion, Andes said the ability to analyze data with unprecedented accuracy is enabling organizations to do a better job of understanding and manipulating their supply cost drivers. "We're better able to get at the right intersection between cost, quality and outcomes," he noted, pointing in particular to the capacity organizations now have to determine how to improve specific service lines.

Andes says the benefits of IT for supply chain managers revolve around the increased capacity to drill down into their costs regardless of the number or nature of their facilities.

[See also: Supply chain IT reaps benefits of EMR innovation]

"They need data in order to prioritize," he said. Whether it's to assess overall spending trends or the particulars of one specific service line, that data is now available.