The Complexities of Senior Living Procurement 

Procurement in Senior Living is uniquely challenging due to the operational structure and external pressures on the industry. Below are key obstacles organizations face: 

• Fragmented Procurement Across Locations
  Managing procurement for multiple locations often results in inefficiencies and compliance issues. With each location operating independently, organizations miss out on opportunities to enforce consistent workflows and secure bulk discounts.  
• Staffing Shortages Impacting Efficiency
  The ongoing staffing crisis in Senior Living is a challenge for procurement teams. According to the National Investment Center for Seniors Housing & Care, 82% of Senior Living operators report struggling with staffing shortages, and 29% attribute this to high turnover rates. Reduced staffing levels leave procurement teams overburdened, with little time for strategic planning . 
• Escalating Costs Across the Board
  Rising costs in healthcare and Senior Living present a growing burden. Since 2000, the cost of medical care, including equipment, services, and wages, has surged by 121.3%, compared to an 86.1% increase in overall consumer prices . In 2024 alone, medical care costs rose by 3.3%, outpacing overall inflation rates. Procurement teams must find creative ways to mitigate these cost pressures without compromising quality or resident satisfaction. 
• Lack of Visibility into Spending
  Limited visibility into spending data exacerbates inefficiencies and increases the risk of rogue spending. Research from Deloitte reveals that 65% of procurement leaders have little to no visibility beyond their first-tier suppliers, leading to missed savings opportunities and difficulty managing compliance . 
• Barriers to Technology Adoption
  While 66.7% of Senior Living providers recognize technology as a priority, only 9% currently use AI-driven tools for procurement. This technology gap limits their ability to streamline processes and uncover savings opportunities. 

How to Improve Senior Living Procurement Efficiency 

To overcome these challenges, Senior Living organizations can adopt strategic, data-driven approaches to procurement. Here are the most effective strategies: 

• Centralize Procurement Activities 
  Standardizing procurement across locations enhances consistency, improves compliance and enables cost savings through aggregated purchasing. By leveraging centralized platforms, organizations gain better oversight and streamline vendor relationships.  

• Leverage Automation and AI 
  Automation reduces the administrative burden of manual tasks, such as approvals and spend reporting. AI-powered tools provide data-driven insights by analyzing purchasing trends and recommending cost-effective alternatives. Predictive analytics help procurement teams forecast inventory needs and avoid overordering or stockouts, leading to more efficient planning. 

• Increase Spend Visibility 
  Procurement leaders who lack visibility into spending often encounter rogue purchases and fragmented data. Implementing tools that provide real-time reporting ensures teams can identify non-compliance, uncover savings opportunities and make informed decisions. According to research from the Chartered Institute of Procurement & Supply, rogue buying accounts for up to 80% of invoices, even in organizations with dedicated procurement departments. 

• Foster Vendor Collaboration 
  Moving beyond transactional relationships with vendors creates opportunities for shared goals, such as cost reduction and quality improvement. Regular performance reviews, audits, and well-defined KPIs such as on-time delivery and pricing compliance, help ensure vendors meet expectations while strengthening long-term partnerships. 

• Address Rising Costs Strategically 
  Organizations can mitigate rising operational costs by negotiating long-term contracts with price locks, diversifying suppliers to reduce risks and leveraging bulk purchasing power. Monitoring regulatory changes, such as staffing mandates, helps procurement teams anticipate and manage financial pressures. 

• Invest in Staff Training 
  Training procurement teams ensures they can maximize the value of technology tools, negotiate effectively, and implement strategic purchasing practices. Well-trained staff are better equipped to handle the complexities of Senior Living procurement and drive efficiencies across the organization. 

Leveraging Procurement Technology for Long-Term Success 

In today’s competitive and resource-constrained Senior Living industry, technology is no longer a “nice-to-have”—it’s a necessity. Senior Living procurement processes that rely on outdated, manual workflows are not only inefficient but also prone to errors and missed opportunities. Technology-driven solutions revolutionize how procurement teams operate, offering unparalleled transparency, efficiency, and control. 

Why Technology Matters 

Procurement in Senior Living is more complex than ever. Rising costs, staff shortages, and increasing regulatory requirements create an urgent need for streamlined and strategic operations. Technology empowers procurement teams to overcome these challenges by providing tools that enhance visibility, reduce manual tasks, and drive data-driven decision-making. Organizations that fail to adopt modern procurement technology risk falling behind their peers in cost control, vendor management, and compliance. 

Key Features of Technology-Driven Senior Living Procurement Platforms 

2. AI-Powered Recommendations 

Artificial intelligence (AI) analyzes historical purchasing patterns, vendor performance and market trends to recommend personalized cost-saving opportunities

Benefits for Senior Living Procurement: 

• Smarter, faster purchasing decisions based on real-time data. 

• Identification of high-performing vendors and cost-effective alternatives. 

• Improved inventory management with predictive analytics to prevent overordering or stockouts. 

3. Predictive Analytics for Strategic Planning 

Predictive analytics leverage historical and real-time data to forecast future needs. This proactive approach helps procurement teams prepare for supply chain disruptions, avoid stockouts and optimize order timing.

Benefits for Senior Living Procurement: 

• Anticipate demand fluctuations to minimize wasted spend. 

• Strengthen supply chain resilience by identifying risks before they impact operations. 

• Enhance budgeting and planning accuracy with data-backed forecasts. 

4. Automated Approval Workflows 

Platforms streamline manual processes by automating purchase requests, approval thresholds and notifications. This eliminates bottlenecks, reduces human error and speeds up procurement timelines. 

Benefits for Senior Living Procurement: 

• Faster approvals reduce delays in essential purchases. 

• Error reduction through standardized and customizable workflows. 

• Frees up staff to focus on higher-value and more strategic tasks. 

5. Spend Visibility and Compliance Monitoring 

Technology enables centralized tracking of all procurement activities, ensuring compliance with preferred vendor agreements, negotiated pricing, and corporate policies. Rogue spending and off-contract purchases can be quickly identified and addressed. 

Benefits for Senior Living Procurement: 

• Improved compliance with negotiated contracts for maximum savings. 
• Reduced rogue spending and enforcement of preferred supplier agreements. 
• Streamlined audit preparation with complete records of procurement activities. 

6. Integration with Multiple Systems 

Many modern procurement platforms integrate seamlessly with ERP, financial and operational systems. This ensures data consistency, reduces duplications and creates a unified performance view . 

Benefits for Senior Living Procurement: 

• Greater alignment between procurement, finance, and operations teams. 

• Simplified reporting for leadership and regulatory compliance. 

• Enhanced decision-making with holistic data insights. 

The Tangible Impact of Technology 

Organizations that adopt technology solutions for procurement see measurable benefits, including: 

• Cost Savings: AI-powered tools and bulk purchasing strategies consistently deliver cost reductions across high-spend categories. 

• Efficiency Gains: Automation and streamlined workflows reduce administrative burdens, freeing up staff to focus on strategic initiatives. 

• Improved Vendor Relationships: Regular performance tracking and data-driven insights foster stronger, collaborative partnerships with suppliers. 

• Risk Mitigation: Predictive analytics and real-time visibility help organizations identify and address supply chain risks before they escalate. 

Senior Living providers who embrace procurement technology position themselves to navigate industry challenges effectively. Solutions like Direct Supply® DSSI™ don’t just solve today’s problems—they create a framework for long-term success. As the Senior Living industry continues to evolve, technology will be the key to unlocking operational efficiency, cost control, and improved quality of care. 

Why Choose Direct Supply® DSSI™ for Senior Living Procurement

For over three decades, Direct Supply® DSSI™ has revolutionized Senior Living procurement. By combining innovative technology and industry expertise, DSSI delivers results, managing $7 billion in annual volume across 19,000 communities. Their tools and services help Senior Living organizations achieve 92% contract compliance while driving significant cost savings . 

In 2025, DSSI is launching a new AI-powered menuing platform designed to streamline foodservice procurement for Senior Living professionals. This tool complements the DSSI platform, offering comprehensive solutions for operational efficiency. 

References

Chartered Institute of Procurement & Supply (CIPS). (n.d.). The impact of rogue spending on organizational efficiency. Retrieved from https://www.cips.org 

Deloitte. (2024). Annual Global Chief Procurement Officer (CPO) Survey. Deloitte Insights. Retrieved from https://www.deloitte.com 

National Investment Center for Seniors Housing & Care. (2023). The state of staffing shortages in Senior Living facilities. Retrieved from https://www.nic.org 

Health System Tracker. (2024). How does medical inflation compare to inflation in the rest of the economy?. Peterson-KFF Health System Tracker. Retrieved from https://www.healthsystemtracker.org 

Senior Housing News. (2023). Survey reveals assisted living plans for technology investments. Retrieved from https://www.seniorhousingnews.com 

With Our Powers Combined: Navigating Procurement Challenges

Our team of healthcare procurement experts unlock numerous benefits for organizations. We work alongside your in-house procurement department to maximize cost savings while maintaining high-level patient and resident care. 

Throughout our 25+ years of experience, we have identified some best procurement practices. Here are our Top Four Ways to Enhance Your Organization’s Healthcare Procurement Process:

1. Complete Order Guide management: Ensure your entire organization maximizes contract compliance and streamlines procurement operations. This is key to maintaining a smooth structure that helps procurement teams stay organized and save money.
2. In-depth analysis and outlier identification: Conduct thorough spend analysis of your purchasing patterns. Identifying outliers that may be affecting your communities’ PPD can help drive cost savings and inform your procurement strategy.
3. Constant monitoring of contracted pricing: Monitor and verify contracted pricing to ensure accuracy and up-to-date data. Your team will be saving the most time and money in purchasing, menuing, etc.
4. Roadmap for operational efficiency: Create a roadmap to guide your organization. You will be operating more effectively and efficiently, and it helps you stay on top of organizational shifts.

How to Enhance the Procurement Process Using DSSI

Spoiler alert – the spend management consulting solution of Direct Supply® DSSI Procurement Services provides help in all of the above areas!

To enhance your healthcare procurement process using DSSI, focus on two crucial factors: 

1. Supplier Contract Management and Compliance
2. Centralization of Procurement Processes

It is vital for all organizations to ensure compliance with supplier contracts and ordering practices across all facilities. By centralizing procurement operations and leveraging DSSI expertise, you can achieve significant improvements in efficiency, cost-effectiveness and other key performance indicators.

Cost Savings and Efficiency Improvements in the Procurement Process

At Direct Supply DSSI, we support healthcare organizations in achieving strategic purchasing, cutting costs and efficiency improvements in their procurement process. Our in-depth spend analysis reveals categorical outliers, highlighting items, locations and habits that impact your spend. Based on these insights, we provide detailed, actionable procurement recommendations that your organization can implement to drive cost savings. 

By implementing these recommendations, your organization can streamline your purchasing process and eliminate unnecessary expenses. This not only leads to cost savings but also improves overall efficiency. Additionally, periodic product category optimizations ensure you are buying the right products at the right time and price.

With the DSSI expertise in strategic sourcing, your organization can identify categorical outliers that may be driving up costs. These outliers could be specific items that are being over-purchased. Other issue points include practices and locations that are purchasing goods or services from non-optimized suppliers.

Our consulting partners will provide expert advice on how to manage complex supply chain management issues. Our spend management solution helps organizations navigate complex supply chain management issues. The DSSI platform helps reduce waste with our Shelves and List functionality and speeds up approval of purchase requests. Our consulting team provides valuable insight into product formularies and how to best take advantage of contracts,

By addressing these issues, your organization can make better informed decisions and adjust your ordering practices accordingly. Our procurement solutions offer the opportunity for reduced costs for products and services. Alongside cost savings, our procurement support will allow you to focus on your own expertise: improving your business operations.

Strategies and Best Practices for Driving Contract Compliance with DSSI

Compliance is a critical aspect of successful procurement operations with Direct Supply DSSI. It is essential to ensure compliance with contract suppliers. Here are a few ways to support your compliance goals:

1. Collaborate with your DSSI procurement professionals to identify and build product formulas. With your strategic supplier relationships in mind, design a thoughtful plan for your business. 
2. Ensure the consistent usage of our DSSI Capture tool throughout your organization. This tool collects “Off System” spend information to increase full spend visibility.
3. Establish effective communication between your organization and the DSSI team to maximize the benefits of our collaboration.

The Role of Technology in Healthcare Procurement

Technology plays a pivotal role in enhancing the healthcare procurement process, especially when utilizing DSSI. Our proprietary technology tools are powered by artificial intelligence and machine learning. They enable us to analyze vast amounts of healthcare procurement data faster than humanly possible. 

This capability allows us to identify spending trends, outliers and new opportunities. These may have previously gone unnoticed and we can bring them to your team to review.

 By leveraging our AI driven procurement technology, we can provide you with unparalleled insights and strategies. In the short term, many time consuming or repetitive tasks can be removed entirely from your procurement activity.

Measuring Success and Impact of Procurement Processes

Effective measurement of the success and impact of procurement process enhancements is vital. The spend management program of DSSI provides measurable success metrics in the following ways:

1. Quarterly Business Reviews, which highlight the exact savings and cost avoidance achieved through our analysis. These reviews offer tangible evidence of the positive outcomes resulting from the use of the consulting services of DSSI.
2. Access to real-time budget tracking in the renowned DSSI platform. This allows organizations to see how individual locations are performing in their purchasing cost goals on a frequent basis.
3. Reporting tools that teams can use to create their own visuals. Teams can dig deeper into their procurement data at an organizational or location level.

Collaboration and Relationship Management with Suppliers

We place a strong emphasis on collaboration and relationship management with suppliers in the healthcare procurement ecosystem. We work closely with suppliers across all facets of your procurement process. 

The DSSI consulting team takes the extra step and actively monitors your pricing. We can step in when the price of specific products doesn’t match the contracted rate in the platform. This client-facing focus ensures that we consistently offer the best purchasing experience. Our approach saves time for the supplier and provider.

Direct Supply DSSI: Leveraging Procurement Cost Savings Across Organizations

Healthcare organizations can greatly enhance their procurement process by leveraging the expertise and resources offered by DSSI. By focusing on compliance, centralization, and utilizing cutting-edge technology, organizations can achieve significant cost savings, improved efficiency, and tailored strategies for success.

Take the first step towards streamlined procurement and improved financial outcomes. Learn more about what sets DSSI apart, and request a personalized strategy for your healthcare organization today. Your procurement process and spend management transformation starts here!

Meeting Evolving Consumer Expectations through Strategic Supply Chain Strategies

Healthcare supply chains are adapting to the growing demand for sustainable, locally sourced food. They are playing a key role in meeting this trend. Meagan Pollak-Harrison emphasizes the importance of selecting strategic vendor partners.

The decisions businesses must make are crucial, whether they are large suppliers or regional vendors. Intelligent supply chain management (SCM) by third party experts is the best solution to evolving challenges.

Many see healthcare food procurement as a tough challenge. Pollak-Harrison suggests contracting local vendors for bakery, dairy, meat, or seafood items. These vendors help source local products. Through negotiation, companies can create contracts directly or with Group Purchasing Organizations (GPOs).

Broadline distribution partners play a key role in sustainable practices. These centers offer a mix of local and conventional products. This helps businesses make informed choices and adopt sustainable practices while keeping familiar routines.

Focusing on eco-friendly disposables helps organizations slowly integrate sustainable practices. This focus builds understanding of various medical products, supplies, and their costs. Healthcare facilities can gain long-term benefits from sustainable inventory management. 

Leveraging Technology and Data Analytics to Navigate Inflation Impacts

Pressures related to inflation have characterized health care in the modern day. Increasing cost of goods and services has prompted businesses to pursue cutting costs by other means. As such, technological integration becomes a vital tool for healthcare supply chain management.

Pollak-Harrison strongly advocates for the integration of technology and data analytics to optimize procurement and supply chain management. Without these tools, healthcare systems are missing out on cost-saving opportunities. In the face of the healthcare supply chain’s rapidly changing landscape, such opportunities are crucial.

Fortunately, innovations in healthcare technology are arriving rapidly to meet the changing needs of customers. Direct Supply DSSI is showing its progress and commitment to this wave of new technology.

The DSSI Order Guide Management technology has evolved into the patented OGM® 3 tool. This technology further advances the management of order guides, centralizing the process and enabling the identification of cost-saving opportunities. Businesses with a focus on cost can improve efficiency and increase cash flow.

With automated purchasing, processes are sped up and less labor is required to accomplish repetitive tasks. This not only helps to reduce costs but also improves efficiency and ultimately enhances patient care. The advancements in healthcare technology mean that there are opportunities to rethink the way supply chains operate.

Advancements in technology provide benefits beyond cost-saving opportunities. Advanced medical devices of all sizes, shapes and uses can be tracked and maintained by cloud-based networks. This “Internet of Things” should be used by providers to understand and connect their operations. The more businesses know about their products, the easier it will be for them to refine the processes that source and transport them.

Artificial intelligence (AI) further enhances these capabilities, automating the discovery of potential cost savings. This technology-driven approach has empowered providers to outperform inflation in healthcare.

A real-world success story has been the use of OGM.ai™ technology. Direct Supply DSSI providers achieved 6% lower food PPD. Inflation was reduced from the 2022 Food Away from Home index of 8.3%. Healthcare cost is down thanks to Direct Supply DSSI technological advancement.

The DSSI implementation of automated features is one example of how technology is driving positive change in the healthcare industry. As healthcare systems continue to evolve, it is essential for organizations to embrace these technological innovations. Healthcare supply chain strategies must include data-driven decision making. It is crucial to staying competitive and providing the best possible care for their patients.

Learn more about how to improve the healthcare procurement process with data driven analysis.

Mitigating Challenges: Overcoming Labor Shortages and Supply Chain Disruptions 

Challenges like labor shortages and supply chain disruptions have become recurring themes for health systems in recent years. Pollak-Harrison identifies the issue of product substitutions as a notable concern. However, solutions like the DSSI OGM 3 technology provide an effective means of navigating these challenges.

Centralized order guides focus on similar products and connect with alternate product selection features. Customers see suitable backup options through real-time inventory checks. This helps avoid problems when a product or service is not available.

This real-time approach enhances visibility and control over delivered products. Additionally, it facilitates on-the-spot decision-making based on price, quality, nutritional value, and more.

 Building Resilience Through Collaboration and Industry Expertise

The value of collaboration and partnership is evident when addressing unforeseen events like the COVID-19 Pandemic. According to Pollak-Harrison, cultivating robust partnerships within the healthcare supply chain is essential for establishing emergency preparedness plans.

Corporate partnerships between healthcare providers and procurement/supply chain support companies like Direct Supply can greatly enhance flexibility in changing economic landscapes. These partnerships enable healthcare providers to leverage the expertise and resources of supply chain specialists.

Equipped providers can adapt swiftly to economic shifts. Through such collaborations, healthcare providers can access a wider range of products and services. This access is crucial in times of fluctuating supply and demand.

Additionally, the expertise of procurement specialists aids in cost management. Direct Supply DSSI can help enforce advantageous terms with vendors and identify cost-saving opportunities. This financial agility allows healthcare providers to navigate economic uncertainties without compromising service quality.

Collaboration also fosters innovation. By working together, healthcare providers and procurement companies can develop new strategies and solutions tailored to specific needs. This joint effort promotes resilience and agility, enabling healthcare facilities to adapt quickly to new economic conditions.

Corporate partnerships with companies like Direct Supply DSSI equip healthcare providers with the tools, resources and expertise needed. Our partnered organizations remain flexible and responsive in a changing economy. These collaborations enhance operational efficiency, cost-effectiveness, and overall quality of care. Partnerships ensure that healthcare providers can continue to meet patient needs, regardless of economic fluctuations.

Strong relationships ensure swift communication and problem-solving when faced with unforeseen challenges. During the pandemic, partnerships allowed businesses like Direct Supply DSSI and Sysco® to optimize order acknowledgement processes. These businesses adapt rapidly to changing dynamics and ensure clear communication with the end users.

Future-Proofing Supply Chain Strategies for the Healthcare Industry

In the post-pandemic world, effective supply chains will manage changes to the flow of goods. In implementing flexible and responsive global supply chains, companies can avoid time consuming disruptions.

Strategies can change quickly when it comes to surprising events like natural disasters. The competitive advantage will go to supply chain professionals who have formed strong relationships with their suppliers. A flexible supply chain network is one with frequent communication, clear production processes and strong quality control.

As we look ahead, emerging trends in supply chain strategies for the healthcare industry come into focus. Pollak-Harrison suggests that staying ahead of the curve involves embracing evolving technologies and approaches.

The smartest, most successful companies will be the ones who make informed decisions. Further integration of AI and data analytics is essential. By fostering an environment of innovation and flexibility, healthcare providers can navigate emerging challenges and provide the best possible experiences.

The Bottom Line

There are many different factors to consider when attempting to make your business more receptive to changing expectations. If you have operations in the United States you might feel that a rebounding economy is a positive sign. However, your international supply chain may still be affected by outside pressures.

Procurement services that you organize internally could be affected by a merger, or labor dispute. This is why forming partnerships with support organizations like DSSI can be a massive benefit to your organizations.

Strategic vendor partnerships, whether with large suppliers or regional vendors, are essential. Local vendors can help source bakery, dairy, meat, or seafood items, making healthcare food procurement more manageable.

Focusing on eco-friendly disposables helps organizations gradually integrate sustainable practices, building an understanding of medical products, supplies, and their costs. This blend allows businesses to make informed choices while adopting sustainable practices. This approach can lead to long-term benefits for healthcare facilities through better inventory management.

Technology and data analytics are vital tools for navigating the impacts of inflation on healthcare. Automated purchasing speeds up processes, reduces labor, and cuts costs.

Artificial intelligence (AI) further enhances these capabilities by automating cost-saving discoveries. As noted, Direct Supply DSSI providers achieved significant cost reductions using OGM.ai technology.

Labor shortages and supply chain disruptions are recurring challenges in healthcare. Technologies like DSSI OGM 3 help manage these issues by providing real-time inventory checks and suitable backup options. This enhances visibility and control over delivered products, allowing on-the-spot decision-making based on various factors.

Collaboration and partnership are key to building resilience in the healthcare supply chain. Partnerships with companies like Direct Supply enhance flexibility and access to a wider range of products and services. These collaborations help manage costs and foster innovation, enabling healthcare providers to adapt to changing economic conditions. Strong relationships ensure swift communication and problem-solving, especially during unforeseen challenges like the COVID-19 pandemic.

Future supply chain strategies in healthcare must be flexible and responsive to avoid disruptions. Frequent communication, clear production processes, and strong quality control are essential. Embracing evolving technologies and approaches, such as AI and data analytics, will help healthcare providers navigate emerging challenges. When providers can focus on their own expertise, they provide the best possible care.

Interested in learning more? Read about the benefits to supply chain automation in healthcare.

How can AI help in Healthcare Procurement?

AI-driven procurement can streamline many different processes. AI can also help in predicting demand for medical supplies and equipment. The advanced knowledge of incoming trends in demand allows healthcare organizations to better plan and manage their inventory. This can prevent shortages and reduce the risk of stockouts, ensuring that patients receive the care they need when they need it.

Additionally, AI can analyze the supplier performance data to identify trends and patterns. Vendor businesses can be inconsistent in decision making, delivery speed and availability. AI is helping healthcare organizations make more informed decisions when selecting vendors. 

AI can assist in monitoring and tracking the quality of products and services provided by suppliers. Data driven decisions ensure that healthcare organizations are receiving the best possible value for their money. AI can automate routine tasks and provide real-time insights. Through this exclusive level of information gathering, AI can help healthcare procurement teams work more efficiently and effectively.

Integrating AI into procurement allows healthcare purchasing teams to drive greater cost savings, improve efficiency, and drive strategic sourcing. With less on their plate, senior living and healthcare providers can focus on providing the best resident and patient care.

How does DSSI use Artificial Intelligence Technology?

Direct Supply® DSSI™ changed the game from procurement automation to optimization. The platform strives to help healthcare procurement experts utilize technology in a way that humans can’t. We are taking this a step further with AI programming and development. DSSI uses artificial intelligence in procurement and supply chain management to help healthcare organizations by:

1: Boosting efficiency with healthcare procurement software

One way in which the DSSI platform leverages AI to boost efficiency is through its Stock-Outs functionality. The system identifies when a product is not available and suggests a similar replacement in real-time. This saves the user time during their buying process. It also avoids a situation where a customer needs an immediate solution, but doesn’t have an existing “Plan B” product. Overall, this feature prevented over 200,000 stockout situations in 2023.

“Humans can’t efficiently process all the data needed to choose the correct products across multiple suppliers and distribution centers. Product availability also changes often, making management nearly impossible,” says Andrew Novotny, Vice President of Product Development and Engineering for Direct Supply DSSI. 

“It’s an arduous problem for a human to solve. The only way we can solve this problem is to look at new healthcare technology trends within artificial intelligence”.

When it comes to healthcare procurement, there’s constant change with product availability. The entire industry is grappling with inflation and supply chain disruptions. Direct Supply DSSI uses data driven procurement technology to ensure supply consistency. The DSSI platform’s real-time, AI-driven order guide management (OGM) tool groups items accordingly. The viewer is shown the best available price, which is based on the closest food supplier.

OGM.ai™ directly integrates with suppliers’ stock inventory to replace products that are not available with the best available option. No longer do healthcare organizations need to worry about a crucial item being OoS without an obvious replacement. You can truly swap-and-save with Direct Supply DSSI healthcare food procurement!

2: Driving cost savings with machine learning in procurement

The DSSI AI engine examines customers’ ordering behaviors to identify recommended products for healthcare based on their individualized ordering algorithm. Traits from purchased products are analyzed by the AI to determine what features customers value most. The system learns user tendencies to make itself smarter, which Novotny believes is in the spirit of AI.

“We’re creating technology to allow purchasers to order what they need quickly and move on with their day,” Novotny says. A more intelligent AI model, trained on more customer data, will provide the best suggestions to customers.

A strong example of DSSI AI driving optimized purchasing can be found with our tool that redirects purchasers to a contract-compliant product. In 2023, this feature automatically redirected over 40,000 purchases that would’ve otherwise broken contract compliance. This feature helped our customers to maintain compliance with order guides, supplier contracts and relationships.

The DSSI AI tools constantly learn from users’ purchasing behaviors. The system understands the best options for senior living and healthcare organizations. We deliver custom procurement savings for each organization.

There are many benefits to implementing machine learning in procurement optimization. The cost saving opportunities provided by this AI-powered software are a source of significant impact. Businesses can use these opportunities for continuous improvement to upgrade and improve any automated procurement system. 

3: Using AI in spend analytics and procurement cost savings

From a DSSI perspective, Novotny says the two top priorities are enhancing efficiency and helping customers pinpoint savings opportunities. Direct Supply DSSI is using AI and algorithms to aid in rebate processing, a complex relationship between manufacturers, purchasing organizations and distributors. AI can look at all the variable factors of product purchasing and determine a lower price for the organization.

Optimized rebate processing can aid in greater procurement contract compliance. Volumes and contract lengths are another factor. It may be better for healthcare customers to swap from Product A to Product B. Product B might actually be a lower total cost. Even though the initial price might be higher, the rebates based on volume end up making it lower. DSSI’s OGM.ai technology helps to identify rebate processing optimization opportunities and other important contract implications, resulting in $18 million in annualized savings for our customers in 2023.

It’s hard to understand procurement cost savings if you can’t visualize them. The data visualization tools allow senior living and healthcare organizations to actively see their procurement patterns and sourcing processes. Their spend analytics can help connect cost, spend and purchasing for optimal procurement within the healthcare sector.

“Our tagline is always ‘Taking Cost out of Healthcare,’” Novotny says. “How can we find unique, novel ways to remove costs for our end users? AI is just one of our tools to do that.”

The Future of the Healthcare Procurement Process

Novotny believes there will be many AI-related additions to help customers make more streamlined purchasing decisions. Procurement teams and AI researchers are constantly developing new procurement software.  As AI becomes more advanced, it will be able to provide even more valuable insights and recommendations to help organizations make informed decisions. It could even evolve to replace labor in certain roles. 

Integrating AI into your healthcare procurement process can enhance your supplier relationships, operations, decision making and data acquisition. In turn, this will boost your bottom line and make your work easier. The artificial intelligence technology of Direct Supply DSSI can solve your largest healthcare procurement challenges.

AI in Healthcare Procurement FAQ:

What is Procurement as a Service?

Procurement as a Service (PaaS) is a strategic approach to managing a company’s procurement needs. This strategy involves expanding various aspects of the process to a specialized service provider like Direct Supply® DSSI™. This concept encompasses a range of related activities, such as supplier management, order processing, data analytics, and cost optimization.

Healthcare providers can benefit a lot from procurement as a service. By partnering with experts like Direct Supply DSSI, they can simplify their purchasing processes. Additionally, they get expert help with sourcing and managing supplies.

The primary goal of PaaS is to relieve the administrative burden associated with procurement. Organizations using PaaS can focus on their core competencies and strategic initiatives. It offers companies the flexibility to scale their capabilities up or down as needed.

Healthcare providers using PaaS focus more on resident and patient care and less on the hassles of procurement. Providers can save money through better-negotiated prices and smarter purchasing strategies. PaaS also offers flexibility, allowing facilities to quickly adjust to changing needs.

With PaaS, there is no longer a need for substantial investments in infrastructure and personnel to support procurement. Healthcare providers can improve cost control, resource management, and the overall quality of care they deliver.

Partnering with Direct Supply DSSI

Direct Supply DSSI is a proven leader in the PaaS industry. We provide strategic sourcing by combining our excellent supplier relationships with intelligent supply chain management. Good procurement starts with strong relationships up and down the supply chain.

We have a proven track record in this area, helping providers and non-healthcare customers to achieve efficiency, savings and growth. You can read more about how we’re leading the way here.

With Direct Supply DSSI, we understand that our customers may have their own internal teams. DSSI isn’t a traditional third-party service. We recognize that many of our valued customers already maintain their own in-house teams. We partner with your team to provide a redefined “Procurement as a Service” solution.

Collaborative Approaches

In traditional models, a third party of procurement professionals takes over and operates in isolation. DSSI embraces a collaborative approach. We work hand in hand with our clients, becoming an integral part of your procurement ecosystem. Our experts seamlessly integrate with your procurement team to ensure a smooth and efficient sourcing and procurement process.

By streamlining the procurement process, we ensure that healthcare facilities have timely access to the highest quality supplies. Our expertise allows healthcare providers to focus on delivering exceptional resident and patient care rather than worrying about supply chain logistics. Through tailored solutions, we help optimize inventory levels, reduce costs, and enhance operational efficiency. Our collaborative customer partnerships also drive innovation by introducing advanced products and technologies that improve patient outcomes.

Customized Healthcare Procurement Solutions

Every organization is unique, and so are its procurement needs. DSSI understands this and tailors our services to align with your specific requirements. Our focus is not on imposing a one-size-fits-all solution.

We focus on co-creating a procurement strategy complementing your business objectives. Our products and services grant a unique competitive advantage.

Enhanced Visibility and Control

Partnering with DSSI doesn’t mean losing control over your procurement processes. On the contrary, our services provide you with enhanced visibility and control. Mitigating risks to your supply chain has never been so easy. 

Through our cutting-edge AI technology and spend analysis, you gain real-time insights into your practices. Our systems provide real-time insights into purchasing patterns and inventory levels, helping providers make informed decisions. This transparency allows for more efficient supply chain management, reducing waste and improving overall operations. 

With easy-to-use reporting and analytics tools, providers get a clear view of their procurement activities. This aids in better financial planning and resource allocation. Additionally, our platforms make record-keeping straightforward, ensuring accurate documentation for audits and compliance.

Continuous Improvement

At Direct Supply DSSI, we are committed to the long-term success of our partners. We don’t just set up shop and leave. Our team is in it for the long haul. We are constantly seeking opportunities for cost reduction and a more efficient procurement process.

DSSI seeks to work closely with our customers and suppliers to ensure compliance to the strategies we develop. We also understand that our work can always be made more efficient. Our proactive approach ensures that your procurement activities remain agile and competitive. 

Scalability and Flexibility

At Direct Supply DSSI, we understand the dynamic needs of healthcare providers and the importance of flexibility and scalability in procurement. DSSI will help you achieve a scalable procurement function. Business environments are dynamic and so are your needs. DSSI offers the flexibility to scale your procurement operations up or down as your business evolves.

We have 20+ years experience with healthcare procurement and over a decade with our PaaS solution specifically. That means that we know how to handle changes to your needs for goods or services. Our advanced procurement solutions allow for customized and scalable purchasing strategies. We enable healthcare facilities to adjust their inventory based on real-time needs. 

Our adaptive mindset helps mitigate risks associated with supply shortages and fluctuating patient volumes. Your purchasing process might change, and we’re there at every step to help you revise your strategy. We will adapt to your requirements seamlessly. By partnering with us, healthcare providers can adapt quickly to changing demands and ensure successful operations. 

The Bottom Line on Direct Supply DSSI as Procurement as a Service

Direct Supply DSSI is not just another provider. We are your strategic partner in the realm of PaaS. We combine the benefits of additional hands on deck with the advantages of a collaborative, client-centric partnership. 

As previously mentioned, we have more than 20 years of experience in healthcare procurement and more than 10 with PaaS. We work hand-in-hand with organizations like yours to handle your procurement needs. Working with us reduces risk to you and opens your company up to connecting with exciting potential suppliers.

When you choose DSSI, you choose a procurement optimization solution that evolves with your business, empowers your team and ensures long-term success. Request a consultation with our team today to learn more.

The Interlink Between Spend Management and Healthcare Cost Management

Implementing effective spend management solutions is instrumental in controlling and reducing operational costs within healthcare settings. By providing visibility into spending patterns, identifying areas for cost savings, and enabling strategic purchasing decisions, these solutions play a crucial role in healthcare cost management strategies.

Strategic Spend Management for Superior Healthcare Cost Management

Aligning Spend Management Strategies with Healthcare Objectives

Strategic spend management goes beyond mere cost-cutting; it aligns procurement and financial strategies with the broader objectives of healthcare institutions, such as quality care delivery and operational efficiency. This alignment ensures that every dollar spent contributes towards the institution’s goals, from improving patient care to ensuring sustainability.

Case Studies: Strategic Spend Management in Action

With over $7B food spend managed annually, Direct Supply DSSI customers save more even as prices go up. Additionally, our customers are able to increase efficiency and compliance rates. For example, our customer, a large food service organization, recently saw their contract compliance skyrocket to over 83% with their largest food broadliner. This achievement underscores the value of DSSI in not only curtailing expenses but also enhancing operational efficiency.

Evaluating the ROI of Healthcare Spend Management Solutions

Key Metrics for Measuring ROI

The integration of over 400 suppliers and 250 corporations within DSSI shows how easy it is to access the necessary materials and items for healthcare facilities within our platform. Our extensive network has been instrumental in achieving significant financial outcomes for our customers. In 2023 alone, customers utilizing DSSI realized savings exceeding $855 million, effectively meeting our strategic objectives of enhancing bottom-line savings and operational efficiencies.

Comparative Analysis: ROI Before and After Implementing Spend Management Solutions

Implementing spend management solutions with DSSI has net positive outcomes. For example, while implementing OGM® 3, our proprietary next generation tool for product and compliance management, our users were able to complete tasks 80-360 times faster than other order guide management systems. This significant time reduction equates to cost savings, with the added benefit of improved accuracy and compliance rates. Our clients have reported not just remarkable time savings but substantial financial savings as well. In 2023 alone, the utilization of OGM 3 and other DSSI spend management solutions contributed to millions saved for our customers. This demonstrates the tangible ROI that comes from leveraging advanced spend management solutions, underlining the effectiveness of DSSI in optimizing healthcare procurement and driving large-scale efficiency improvements as well as corporate adoptions.

Overcoming Challenges in Managing Healthcare Costs and Value

Identifying Common Obstacles

Healthcare institutions face numerous challenges in cost management, from fragmented procurement processes to lack of spending visibility. Spend management solutions address these issues head-on, providing the tools and strategies necessary to overcome these obstacles.   In considering the broader landscape of procurement challenges, the concept of Procurement as a Service (PaaS) emerges as a high-level solution, going beyond traditional third-party vendor roles. Rather than merely supplementing existing processes, PaaS providers like DSSI engage with their clients, including those with internal procurement teams, to collaboratively reshape and optimize procurement operations. This partnership approach is instrumental in overcoming common procurement obstacles by offering enhanced visibility and control over spend management. It also allows for the development of tailored procurement solutions that are specifically designed to meet the unique needs of each organization. Through such collaborative efforts, clients gain a strategic ally in their pursuit of efficient, effective, and success-oriented procurement systems. This paradigm shift towards a service-oriented model facilitates a more integrated, proactive approach to procurement, setting a new standard for operational excellence and strategic success.

Ensuring Value with Spend Management Solutions

Ensuring value for money is critical in healthcare procurement. Spend management solutions facilitate this by enabling strategic sourcing, contract management, and supplier performance evaluation, ensuring that healthcare institutions get the best value from their spending.

Future of Healthcare Cost Management Solutions

Technological Advancements in Spend Management

The future of spend management in healthcare is promising, with advancements in AI, Machine Learning, and predictive analytics poised to further transform cost management strategies. DSSI is at the forefront of these advancements, integrating cutting-edge technologies into solutions to meet the future needs of healthcare institutions.

Preparing for the Future: Recommendations for Healthcare Institutions

To stay ahead, healthcare institutions must embrace these technological advancements and invest in spend management solutions that offer scalability, flexibility, and advanced analytics. By doing so, they can ensure sustainable cost management and value generation.

Unlock Spend Management Solutions for Taking Cost Out of Healthcare

The ROI of implementing spend management solutions in healthcare is clear, offering significant benefits in cost savings, operational efficiency, and strategic procurement. Direct Supply DSSI stands as a testament to the potential of these solutions to transform healthcare cost management. Explore the suite of solutions offered by Direct Supply DSSI, unlocking the benefits of strategic spend management for their institutions. By focusing on the strategic integration of spend management solutions, healthcare institutions can not only manage costs more effectively but also enhance their overall operational efficiency and patient care quality. The journey towards optimized healthcare cost management is complex, but with the right tools and strategies, it is undoubtedly achievable.

Which is the Best Format for my Healthcare Procurement Strategy?

PunchOut Catalogs:

PunchOut catalog capabilities and features vary by supplier. While PunchOut catalogs can be easy to set up, the system usually offers limited content control. 

PunchOut solutions often require users to navigate multiple external vendor websites to complete their purchases. This can lead to fragmented processes and inconsistencies in data.

Furthermore, the user experience can suffer with punchout solutions. Navigating various supplier websites can be cumbersome and time-consuming, detracting from the efficiency and convenience of the procurement process. Users may find it frustrating to switch between different platforms, leading to decreased productivity.

Suppliers may update or add products to a punchout system without notifying organizations of changes, including pricing. Because suppliers control site content, they may market unwanted promotions and coupon codes to end users. This can cause expensive disruptions to controlled procurement activities and strategies.

Without contracted pricing in place, users may over-purchase non-essential items to take advantage of seemingly attractive pricing discounts. This is wasteful spending, and it can hurt an organization’s business process.

PunchOut Catalogs don’t require a lot of management, which may lead to under utilized contracts and limited purchasing power in future negotiations. This is all to say, PunchOut catalogs can save time for your organization, but spend management over products and services can become much more difficult. 

Hosted procurement solutions eliminate these issues by integrating all vendor catalogs and purchasing activities into one cohesive platform. This integration not only saves time but also improves data accuracy and consistency, as all transactions are recorded within the same system.

Hosted Catalogs:

Hosted catalogs give organizations full control over the pricing that gets loaded. A quality procurement system should require organization approval when a supplier wants to update the product information and price. In addition, organizations can expect functionality to validate a purchase order with the associated invoice and support when discrepancies arise.

In a hosted catalog structure, product data can be depended on to remain relatively consistent. Product descriptions and special offers won’t be changed without the organization knowing about it. This eprocurement system also allows for greater vendor management, meaning you can set more controls over sourcing and pricing. A dependable pricing structure and product catalog makes risk management easier for your organization.

A hosted procurement system supplies benefits beyond consistency in product selection and price. Your procurement team will be able to reduce wasteful spending by requiring a more comprehensive approval process. All product data is centralized into one platform. Now that all of the required information is in one place, it’ll be easier to identify the quantity of raw materials or other products necessary to purchase. 

Security is another critical advantage of hosted procurement solutions. These platforms are designed with robust security measures to protect sensitive data, ensuring compliance with industry standards and regulations. Punchout solutions rely heavily on multiple external sites. The decentralization of information may pose greater security risks due to varying security practices among vendors.

Your procurement system may also allow for more comprehensive approvals based on product indicators.  For example, a non-contracted product would allow for additional oversight. Additional visibility into purchasing ensures users are making the most  cost-effective purchases. 

Our Advice for Healthcare Procurement Professionals

When considering a PunchOut or a Hosted catalog solution, stay focused on your desired outcome and procurement goals. From a technological standpoint, PunchOut catalogs offer a simpler process than creating a Hosted catalog. While PunchOut catalogs may offer immediate time savings, they are limited to a supplier’s site features.

Hosted procurement solutions offer a more efficient, secure, and scalable approach to procurement compared to punchout solutions. Centralizing all purchasing activities, enhancing visibility and control, and providing robust support are just some of the benefits. Hosted solutions empower healthcare providers to optimize their procurement processes and focus more on delivering high-quality patient care.

If you’re a procurement manager seeking more comprehensive control and savings, Hosted catalogs are the better option. Hosted catalogs guarantee cost control, which is often a primary reason for putting a healthcare procurement solution in place.

Learn more about Direct Supply’s DSSI procurement solutions here.

Why are Mergers & Acquisitions becoming so common?

According to the McKnight 2024 Outlook, nearly 40% of Skilled Nursing owners and executives believe they will sell some or all of their senior living portfolio in 2024. There are a number of reasons leading to these healthcare mergers and acquisitions within Skilled Nursing:

1. High inflation
2. Unstable Medicare and Medicaid reimbursements
3. Increased labor costs
4. Stagnant incoming revenue
5. High interest rate pressure

As inflation costs increase worldwide, many providers have struggled to gain a foothold financially. Even before inflation rose, it was difficult for smaller providers to manage procurement, labor costs and new regulations. Now they must do so while grappling with higher prices. This has led to smaller organizations merging with larger ones to absorb their financial burden. 

With our expertise, healthcare facilities can consolidate their supply chains, ensuring consistent product quality and availability across all locations. Direct Supply DSSI offers valuable support in managing increased demand, optimizing inventory, and reducing costs. Our data-driven insights and analytics provide a clear view of procurement activities, helping to identify opportunities for savings and efficiency improvements. By working with us, healthcare providers can focus on integrating their operations and delivering excellent resident care, knowing their procurement needs are in expert hands.

M&A trends continue to emerge as the senior living industry recovers from the COVID-19 pandemic. DSSI is here to help your organization establish efficient procedures in your procurement activity.

Mergers and Acquisitions: What problems can DSSI help with?

One large struggle is figuring out how to handle procurement. This struggle is especially evident when your team hasn’t had a designated procurement professional in the past. For most mid-sized organizations, managing vendors and establishing a procurement strategy are tasks that fall by the wayside. 

When merging or acquiring new companies or assets, there may be inconsistencies in supply chain management. This can lead to potential disruptions in product availability and quality. Coordinating inventory across multiple locations becomes more difficult, and managing increased demand can strain existing resources. Additionally, aligning the procurement strategies of merging entities can be challenging, as each organization may have different practices and vendor relationships. 

As your organization gets larger, these questions within procurement become necessary to answer to establish financial success. Saving time, cost reduction, and risk management become areas of interest. Getting your arms around what strategic procurement looks like in healthcare and senior living is priority one. And luckily, DSSI has a wealth of experience helping folks navigate that transition.

Our decades of experience in supply chain management helps our customers in the healthcare industry save money. We can help manage suppliers, improve contract management and develop a cost effective strategy that works for your business. 

When should DSSI get involved in the M&A process?

Early communication is key. One benefit of working with DSSI is the industry expertise established over the last 30+ years. Our procurement data from so many successful partnerships helps us to make informed decisions. The DSSI team is here to support your growth and success, and we can add significant value throughout the M&A process and beyond. 

The DSSI procurement strategy is built on supporting your relationships with your suppliers. We will support your communication with your supply chain throughout the process. We will implement a procurement system to give you the control that you’re looking for. Products and services your organization requires will be purchased from visible, trusted suppliers

The DSSI spend management consulting team will also support your expanding internal procurement team. The system establishes standardized purchasing processes and provides an opportunity for your organization to instill confidence. It can also aid in quickly acclimating the team members you have also acquired through the acquisition or merger. Your procurement department will be our close partner, working with us on supplier negotiating, inventory management, and ensuring compliance with your plans for your procurement operation.

How can healthcare providers leverage DSSI when acquiring new buildings?

Buildings are being shuffled like cards in a hand of poker and they’re changing owners rapidly. There’s an opportunity to leverage DSSI technology and industry expertise to establish a healthcare procurement strategy.

Establishing a data-driven strategy will reduce the time you need for procurement management, even in the short term. Whether that’s relationships with vendors or analyzing your spend to find opportunity for savings, or just less time managing the requests and approvals that are necessary for large purchases, all of those burdens can be lessened with a system like DSSI.

What are the benefits of partnering with DSSI?

There is a large list of benefits to the DSSI procurement solution in general. With respect to customers undergoing mergers and acquisitions in particular, one really stands out. Real-time visibility into the spend-down that’s happening in your buildings can be crucial to identifying opportunities for cost reduction. 

As a new owner, one challenge is the lack of long-standing personal relationships with your new employees. You’re trusting that they’re acting in your best interests, but you may be operating on blind faith. Working with DSSI ensures that a second eye is watching your new employees and helping them learn how you do business.

With DSSI, you can reduce risk, remove time consuming tasks and a wide range of other helpful benefits. You can see everything from the orders that are being placed, including your approvals on those orders. You can see how well your new buildings are complying to your existing contracts. If employees are ordering off contracts with vendors you have not approved, you’ll know.

Direct Supply DSSI allows you to be an active manager because it gives you visibility into data you would need. It’s better than being reactive based on the financial reporting that you would otherwise produce routinely. Protect your bottom line with DSSI.

Tip 1: Start Early (If You Can!) and Set Clear Objectives

While the healthcare budgeting season should never be a last-minute scramble, with limited staffing, things can fall through the cracks. If you feel unprepared this year, don’t worry – begin by establishing clear objectives. What do you want to accomplish this fiscal year? 

Here are some thought starters:

• Consider the financial goals of your business or procurement department, the resources needed to achieve them and any potential challenges. By defining your goals, you’ll be better equipped to make informed decisions throughout the budgeting process.
• Remember, goals can change. Be flexible – if departmental or business goals change as they relate to your budget, then change with them as best you can. Keep in mind that the overarching goal is to play your part in controlling spend and overseeing how to best serve your customers.

Tip 2: Leverage Data and Analytics

In the world of procurement, data is your best friend. Gather and analyze historical spending data, vendor performance metrics and market trends. This will empower data-driven decisions and identify areas where cost savings or process improvements are possible. By utilizing historical knowledge and analytics, you can optimize your budget for maximum impact.

Tip 3: Collaborate Across Departments

Budgeting is a team effort, and collaboration is key. Involve key stakeholders from various departments, such as finance and operations, in the budgeting process. This input can provide valuable insights into department-specific needs and challenges, ensuring a more accurate and well-rounded healthcare budget plan. 

Tip 4: Prioritize Strategic Investments

Distinguish between essential expenditures and strategic investments. Keeping expenses in line is important, but don’t overlook investment opportunities to drive long-term growth and efficiency. Prioritize initiatives aligning with your business’s mission. 

Tip 5: Plan for Contingencies

Uncertainties are inevitable. Be prepared for unexpected challenges by setting aside a contingency fund within your budget. Having a financial safety net will help your organization navigate unforeseen circumstances, such as supply chain disruptions or regulatory changes, without jeopardizing core operations.

Tip 6: Get Your Budget Over to Direct Supply® DSSI™

Making your budget might take a while; good thing updating it within Direct Supply® DSSI™ takes just a moment! Direct Supply DSSI offers two ways to update your budget and census data: you can use a back feed (an automated file transfer) to send us your budget and census information monthly, weekly or even daily. We also offer a manual update option with our Budget Control Administration online tool. Either way, you’ll need just one or two files for all your data.

Leveraging an eprocurement technology platform to monitor your budget throughout the year helps with keeping track of your expenses and ensures that you’re always in control of your financial planning. Direct Supply DSSI simplifies the process, providing visibility on demand, so you can make informed decisions and allocate resources more efficiently. With the ability to monitor your budget in real-time, you’ll have the power to adapt to changing circumstances, respond to unexpected expenses, and ultimately optimize your financial management. Direct Supply DSSI empowers you to stay on top of your budget with ease, making it a valuable asset for organizations looking to streamline their procurement processes and financial planning. Interested in learning more? Read our blog on how to enhance your healthcare procurement process. 

Budgeting For a Robust New Year

Healthcare budgeting season may be daunting, but with careful planning, data-driven insights, collaboration, strategic thinking, and contingency planning, you can navigate it successfully. Direct Supply DSSI is here to support you every step of the way with our advanced procurement tools and expertise. By implementing these tips and leveraging our solutions, you can ensure that your senior living community and procurement department thrives in the coming year. 

To answer any questions you may have, reach out to a procurement services expert today.

The Changing Landscape of Food Supplement Procurement

Previously, healthcare food supplements have been developed by two primary manufacturers. As many in healthcare procurement might be aware, one manufacturer has ceased production of a popular nutritional treat supplement, while the other is struggling to pick up raw materials needed to obtain inventory. These disruptions have increased the cost of these supplements for our providers. 

Overall supplement prices have increased 3% in the last 12 months but the cost for nutritional treat alternatives are anywhere from 40-200% more expensive per serving. 

Understanding Food Supplement Categories

To effectively manage costs and explore alternatives, it is important to understand the different supplement categories available. Nutritional treat supplements, known for providing protein and calorie supplementation, have been widely utilized by many providers. However, the recent cost increase and product availability has made it necessary to evaluate other options.

Controlling Costs and Making In-House Alternatives

One cost-saving approach is to make your own supplements.  You can collaborate with broadliners and your menu partners who can often share recipes for fortified foods. These recipes allow you to focus on providing nutrition through food first, rather than relying solely on supplementation.

For example, can you make a nutritious shake or a fortified cereal that can be added to residents’ breakfasts? Homemade options provide an opportunity to tailor the supplements to the specific needs of your residents and potentially reduce costs. However, it is important to consider labor challenges and ensure stable labor within your facilities before implementing these homemade alternatives.

While prioritizing a food-first approach is ideal, certain situations may necessitate the use of more expensive supplements based on physician’s orders or family preferences.

However, there are tools such as temporary order guides on the Direct Supply® DSSI™ OGM® 3  platform available to ensure that expensive supplements are only used when necessary. This allows for easy removal from the order guide once the supply chain stabilizes.

 The Future is Food

Food supplements are a necessary aspect of healthcare food procurement, but balancing their use with a food-first approach is crucial. Staying informed about the supplement market, exploring cost control strategies, and considering homemade alternatives will help healthcare experts better navigate this challenging category within their procurement process.