How Mercy Health Consolidated Its Supply Chain

Facing rising costs and inconsistencies, health systems are strengthening efficiency by vertically integrating their supply chains. When Mercy Health began partnering with Medline, a medical supply manufacturer and distributor, in April 2017, products flowing through its medical-surgical distribution channel were 2% standardized. Now, they're more than 50% standardized. Mercy has also slashed its distribution centers from 14 to two and reduced its manufacturers by 50%, according to a Medline case study provided to Supply Chain Dive.

Mercy Health's integrated delivery network which has about 500 health care facilities serving Ohio and Kentucky is at the cutting edge of a growing trend among health systems. Battling rising costs and seeking greater patient satisfaction, health systems are forming partnerships to standardize a long-outdated and clunky part of their systems: supply chains. Faced with lower reimbursements and inpatient volumes, most health systems have already implemented standard cost-cutting measures, and now need new places to trim.