Image (from left to right): Scott Becker, Founder of Becker's Healthcare and Partner at McGuireWoods; Dale Yake, CEO of PT Solutions; Steve Liou, Clarium Founder and CEO; Rick Carrico, CFO of Baptist Health (KY and IN); and Sam Perkins, Co-Founder and President of Nourish
Clarium CEO and Founder Steve Liou spoke about the importance of supply chain in helping health systems reduce margin pressures at J.P. Morgan's CEO/CFO Health System Summit in New York City this week.
Steve shared his insights on a panel, "Managing the Margin," moderated by Scott Becker, Founder of Becker's Healthcare and Partner at McGuireWoods. The panel, part of the multiday JPM Health System Summit event, looked at whether the playbook for health systems managing margins has changed over the last few years or if they're still leveraging the same playbook.
In making the case to CFOs for focusing on the supply chain, Steve noted that health systems currently have margins in the 1-2% range. They're facing another 600-700 basis points of margin pressure over the next five years, per McKinsey.
"You need to act," Steve said. “Supply chain is the second-largest expense on your P&L.”
Steve estimated that a typical health system spending $400M on medical supplies could optimize around 15% of that spend, yielding roughly $60M in average savings. Some of the biggest savings in the supply chain can come from using AI to optimize inventory management and reduce operating room supply waste, he said.
During the panel discussion, Steve spoke about why it's important for supply chains to normalize, unify and surface their data. This strategy enables leaders to see exactly what they're buying, where it's being used, and what it actually costs.
"One of our health system clients manages over 400,000 product SKUs," Steve noted during the panel. "For perspective, someone like Costco manages 4,000 product SKUs. We're talking about a 100x difference. It's an enormous data challenge that, prior to AI, was impossible to manage."
Other panelists included Sam Perkins, President of Nourish; Dale Yake, CEO of PT Solutions; and Rick Carrico, CFO of Baptist Health in Kentucky.
