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Gartner Sees Three Major Healthcare Supply Chain Themes

November 11, 2021

Gartner has released its 13th annual Gartner Healthcare Supply Chain Top 25 ranking. To reflect growing maturity across the healthcare and life sciences supply chain, the ranking now solely focuses on U.S. health systems.

“We’re making the move to an all-healthcare-provider ranking because we recognize that the healthcare supply chain has made significant progress in size, scope and capabilities compared to when we started the ranking in 2009,” said Eric O’Daffer, vice president analyst with the Gartner Supply Chain practice. “This shift in methodology allows for more healthcare providers to be featured in the ranking and for a better distinction from our Supply Chain Top 25 ranking, which is global and covers all industries.”

In this revamped ranking, Cleveland Clinic takes the top spot with the highest overall peer and analyst opinion scores. Banner Health, Ochsner Health Systems, Baylor Scott & White Health and Mercy complete the Top 5 (see Table 1). As a result of the new methodology, eight healthcare providers make their debut.

“Cleveland Clinic is a prime example of sustained leadership,” O’Daffer said. “They excelled in optimizing the clinical supply chain across products and services, including new construction, pharmaceuticals and purchased services. RFID-based point-of-use technology now spans across most procedural areas, increasing patient safety, capturing revenue, and reducing loss and expiration.”

In its fourth year, the Healthcare Supply Chain Top 25 Masters recognizes sustained supply chain leadership in healthcare. To be included, those health systems must have attained top 5 composite scores in any seven of the last 10 years.

“Mayo Clinic and Intermountain Health Care sustained their standing as Masters for yet another year. Even with the pandemic still disrupting healthcare, they expanded their operations, piloted new home care programs and continuously improved their capabilities,” O’Daffer said.

Table 1: The Healthcare Supply Chain Top 25 for 2021

2021 Ranking Company Name Bond Rating1 IBM Watson Health 15 Top Health Systems Study2 Peer Opinion3 Gartner Opinion3 Composite Score4
1 Cleveland Clinic AA 2nd Quintile 785 255 7.64
2 Banner Health AA- 2nd Quintile 571 225 6.84
3 Ochsner Heath System A Top Quintile 637 187 6.50
4 Baylor Scott & White Health AA- Top Quintile 487 119 5.80
5 Mercy A+ Top Quintile 492 154 5.79
6 Spectrum Health AA 2nd Quintile 406 150 5.49
7 Bon Secours Mercy Health AA- 2nd Quintile 340 175 5.46
8 UPMC A 3rd Quintile or Lower 608 210 5.35
9 Advocate Aurora Health AA 2nd Quintile 413 145 5.29
10 AdventHealth AA Top Quintile 445 91 5.26
11 Ascension  AA+ 3rd Quintile or Lower 375 165 5.26
12 Northwestern Medicine AA+ 2nd Quintile 339 117 5.24
13 BJC Healthcare AA 3rd Quintile or Lower 496 107 5.10
14 Trinity Health AA- 2nd Quintile 347 127 5.08
15 Scripps  AA Top Quintile 208 116 4.99
16 Geisinger AA- 3rd Quintile or Lower 490 131 4.97
17 Novant Health AA- 3rd Quintile or Lower 340 176 4.80
18 Duke Health AA 3rd Quintile or Lower 419 151 4.54
19 HCA Healthcare BB+ 2nd Quintile 491 117 4.45
20 Parkview Health AA- Top Quintile 115 105 4.44
21 Rush Health A+ Top Quintile 152 97 4.22
22 HonorHealth A+ Top Quintile 172 83 4.15
23 Sentara Healthcare AA 15 Top 89 63 4.14
24 Indiana University Health AA 3rd Quintile or Lower 279 89 4.12
25 BayCare  AA Top Quintile 85 73 4.08

Notes:
1 Bond Rating: All ratings were mapped to the S&P rating system using an industry-standard mapping system.
2 IBM Watson Health 15 Top Health Systems Study: Based on score in IBM Watson Health's 2021 15 Top Health Systems Study
3 Peer Opinion and Gartner Opinion: Based on each group’s forced-rank ordering of performance to Gartner’s Healthcare Supply Chain Capabilities Model
4 Composite Score: (Peer Opinion × 32.5%) + (Gartner Opinion × 32.5%) + (Bond Rating × 15%) + (IBM Watson Score × 20%)        
2020 data used where available. Where unavailable, latest available full-year data used.
All raw data normalized to a 10-point scale prior to composite calculation.

Source: Gartner (November 2021)

Three major themes stand out when looking at the leading health systems:  

Increased Risk and Resilience Capabilities

The COVID-19 pandemic with its ups and downs forced health system supply chains to deal with all kinds of disruptions and shortages, from personal protective equipment (PPE) availability to talent shortages. While this was a challenging situation for supply chain leaders in healthcare, they took on the challenge and are now witnessing the results of their efforts.

“There’s a new understanding of the impact that the supply chain has on operational ability in health systems,” O’Daffer said. “As a result, we’ve seen organizations start to think about hiring people to lead resiliency efforts, people who can consider the risk and resiliency mandates for health systems and align the supply chain response accordingly.”

Expanded ESG Efforts

Supply chain leaders are also thinking about the environmental, social and governance (ESG) aspects that the C-suite and other stakeholders may be demanding of the supply chain. This means, for example, expanding diversity, equity and inclusion (DEI) initiatives and forming partnerships to mitigate health equity issues.

Focus on Collaboration

The pandemic showed how important collaboration is in the case of PPE and the manufacturing of capital equipment like ventilators. Many organizations, including manufacturers, realized that they can’t fulfill their mission without more collaboration with the health systems. In turn, the health systems recognized that they need an efficient supply chain that has the right product at the right place and at the right time, and that they need the resources of the manufacturers of clinical equipment to better serve their patients.

“Collaboration is hard work. However, if done right, the collaborative enterprise spans everything from placing an efficient order to visibility and transparency of where products are manufactured. It extends to the goal of driving an outcome for a patient. Collaboration, in this sense, is about having the right product at the right place and at the right time so that clinicians aren’t looking for that product,” O’Daffer concluded.

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