Thomas Jefferson University Hospital's ongoing initiative to reduce non-labour expenses

Abstract

For health systems to survive or hoping to grow in the new healthcare era, a centralised strategic sourcing function is essential to maintaining and enhancing margin and ensuring the right new technologies are in the hands of clinicians. Sourcing cannot just be about price containment and contracting, it must focus on helping health systems grow through margin enhancement, pioneering the use of new technology and championing the advancement of care. Sourcing departments must become trusted partners of administrators and clinicians, and shed the reputation of being the department engaged only when a purchase order is needed or contract requires signature. Strategic sourcing begins with engagement of main departments and decision-makers within the institution, seeking to understand their needs and objectives and their associated dependencies on suppliers and third parties, and aligning the resource and activity of the sourcing team to support those needs. Success is based on the ability to implement a strong core of sourcing professionals who are empowered to identify, explore and lead product review and selection opportunities, and who follow a rigorous, comprehensive sourcing process that is focused on strategic business alignment, sourcing strategy development and execution and objective decision-making, all of which this paper will explore.