Smart Procurement, Automation Essential For Healthcare Sustainability: Experts
Balancing cost, quality, and innovation is key in healthcare supply chain management
As healthcare evolves, the importance of efficient procurement strategies and informed decision-making has never been more critical. This was the focus of an insightful panel discussion on smart procurement and decision-making in healthcare. Leading experts gathered to share their experiences and strategies for balancing cost, quality, and innovation in the healthcare supply chain.
The conversation opened with a focus on the central role of supply chain management in healthcare, which represents one of the highest expenditures for any healthcare organisation. All through the patient journey, from consultation to hospital admissions, everything boils down to how to deliver the best quality care while keeping costs in check.
Managing Risks In Healthcare Supply Chains
Venkatesan N, Director and Chief Procurement Officer, Max Healthcare, addressed the significant risks involved in managing healthcare supply chains, including over-ordering, under-ordering, and the challenge of balancing clinician needs with financial constraints. "Supply chain is critical as it directly impacts the revenue and EBITDA of a healthcare organisation," he said. Venkatesan explained that managing inflation, dollar fluctuations, and rising transportation costs are ongoing challenges that require careful oversight and smart procurement strategies.
He emphasised the role of automation in mitigating these challenges. At Max Healthcare, the implementation of data-driven procurement processes and automated systems has reduced costs and stock shortages. "We have introduced smart procurement where everything is based on data analysis. The system automatically generates purchase orders and releases them to vendors, which has streamlined operations and reduced human error," he explained. He also stressed the importance of maintaining strong relationships with suppliers, particularly during crises like the COVID-19 pandemic, to ensure the availability of essential supplies.
Role Of Automation And Data In Procurement
Pradeep Mishra, AVP of Central Procurement and Supply Chain, Paras Healthcare, discussed the challenges of integrating automation into procurement processes, particularly in dealing with data silos and the lack of system integration. "While most healthcare providers now use hospital information systems (HIS) and enterprise resource planning (ERP) software, the challenge lies in effectively utilising the data generated by these systems," he noted. Mishra pointed out that while digitisation offers significant benefits, it requires the involvement of human intelligence to interpret data and drive decision-making.
"Business intelligence tools and artificial intelligence can transform supply chains, but only when combined with human expertise," he added. Mishra advocated for the development of more sophisticated business analytics to improve procurement efficiency and decision-making, particularly in areas like supplier selection and inventory management.
Balancing Clinical Needs With Procurement Decisions
Dr. Aakaar Kapoor, CEO and Lead Medical Adviser, City X-Ray and Scan Clinic, provided insights into the complexities of procuring high-tech medical equipment like radiology machines. He explained that clinical requirements must be the primary driver in procurement decisions. "We first assess the clinical requirements and the demand in the area before shortlisting equipment," Dr. Kapoor said. He emphasised the importance of selecting machines that meet technical needs and integrate with existing systems, as well as the need to consider factors like throughput, workload, and long-term maintenance costs.
"Once we ensure that the equipment meets our technical and clinical requirements, we evaluate vendor quality, logistics support, and after-sales service. It's crucial to have a cost-benefit analysis and involve the finance team to ensure sustainability," he added. Dr. Kapoor also highlighted the need for continuous education and staying updated with the latest advancements in medical technology to make informed procurement decisions.
Public Sector Perspective On Procurement
Urvashi Prasad, Former Director, Niti Aayog, discussed the challenges of procurement in the public healthcare sector. She pointed out that fragmentation within the system, with different health schemes and state regulations, complicates the procurement process. "We are working towards greater centralisation and integration across different systems to achieve economies of scale and consistent quality," she said. Prasad also stressed the importance of using technology to streamline procurement processes and reduce stock-outs, which are common in public healthcare.
Addressing the issue of indigenous versus imported medical equipment, Prasad acknowledged the need for a balance. "While promoting indigenous innovation and manufacturing is crucial, we cannot ignore the immediate needs of patients. If better technology is available abroad, we must find ways to make it accessible here," she stated.
Quality Vs Cost Dilemma
The panellists also discussed the ongoing challenge of balancing cost with quality in healthcare procurement. Venkatesan emphasised that while cost is a critical factor, quality cannot be compromised, especially in fields like oncology where high-end imported drugs and equipment are essential. "In another 10 years, costs are going to rise significantly, driven by new technologies and increasing demand. We need to find ways to manage these rising costs while maintaining quality care," he cautioned.
Dr. Kapoor echoed this sentiment, adding that procurement decisions must be driven by clinical needs and not solely by cost considerations. "It’s crucial that procurement is organisation-driven, not vendor-driven. We must know our requirements and ensure that the equipment we choose is future-proof and sustainable," he said.
The discussion highlighted the importance of smart procurement and decision-making in sustaining healthcare institutions while ensuring quality patient care. The panellists agreed that a balanced approach, leveraging automation, data-driven decision-making, and continuous innovation, is key to overcoming the challenges in healthcare procurement.
“Procurement is not just about cost; it’s about making informed decisions that balance quality, clinical needs, and financial sustainability,” Dr. Shelly Mahajan, Lab Director, of Mahajan Imaging and Labs said while moderating the session at the third annual Business of Healthcare summit.
