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Growing hospital systems face new supply-chain challenges

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Hospital systems that have grown fast by buying physician practices and outpatient-treatment centers have had their hands full trying to integrate them into their existing supply-chain distribution systems as they seek  to apply the low prices  from  bulk purchasing to geographically dispersed facilities.

Modern Healthcare reports that the challenge has led some “supply-chain officials to serve their expanded network’s need for drugs, vaccines, tests and other supplies from their own warehouses. They are saving money by buying in bulk and creating, in effect, a van-based distribution system to replace the services offered by distributors such as Henry Schein Inc. or McKesson Corp., which specialize in shipping to physician offices and other non-acute locations.”

“But others have chosen to outsource distribution. That often means their newly acquired facilities continue their long-standing relationships with existing distributors, who for years have specialized in serving the geographically dispersed physician and ambulatory surgical center market. But sometimes they forge new relationships to capitalize on growing competition in distribution, which can even come from combined manufacturer-distributors such as Medline Industries or Cardinal Health,” the publication reports.

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