Americans concerned with the growing proportion of GDP devoted to healthcare would do well to consider the industry’s supply chain. Soon the cost of drugs and medical supplies will equal the cost of labor and benefits in the U.S. healthcare system, a situation that could derail reforms aimed at increasing access and coverage. Professor Eugene Schneller, who heads the W. P. Carey School’s Health Sector Supply Chain Research Consortium, offers his top 10 list of challenges for health care supply chain managers. This is the first in an occasional  series of opinion essays authored by experts at the W. P. Carey School of Business.

A small but growing number of U.S. hospitals are using a version of quid pro quo to achieve two crucial goals: lock in the "rainmaker" physicians — the ones who are at the top of their specializations — and secure the best deal from suppliers. The most creative have found that this model produces stellar results when applied as a strategic tool, according to speakers at a recent conference presented by the Health Sector Supply Chain Research Consortium at the W. P. Carey School of Business.

If, as healthcare experts say, supplies gobble up 30 percent of a typical American hospital’s annual budget, then upgrading the medical supplies system is a sensible investment. At a recent conference sponsored by the Health Sector Supply Chain Research Consortium at the W. P. Carey School of Business, Sisters of Mercy Health System’s vice president of performance consulting, Marita Parks, and Thomas Macy, CEO of Nebraska Orthopedic Hospital, described two different approaches to the supply chain challenge.