How Henry Ford Health Uses Data to Combat Inflation and Improve its Supply Chain

While inflation is an ongoing concern for hospitals nationwide, the Detroit-based non-profit Henry Ford Health managed to bring its supply expenses down last year, a fact that Senior VP of Supply Chain Management Bill Moir takes pride in.

Henry Ford operates five hospitals and more than 250 facilities providing primary care, cancer and orthopedics care, behavioral health services and urgent care.

The health system worked with group purchasing organization Premier to leverage data and identify supply categories that should not be impacted by inflation and more effectively negotiate for lower prices based on that information.

While inflation was significant between 2018 and 2022, the health system’s costs trended down last year in its cost per case mix adjusted equivalent discharge (CMAED), one of the most common benchmarks hospitals use to evaluate supply expenses, he said. The measure takes into account both inpatient and outpatient volumes adjusted by a hospital’s case mix index, helping to indicate the institution’s cost management and efficiency, considering the acuity of the patients being treated.

Moir noted that Henry Ford is moving in the right direction for other operational metrics as well, such as data accuracy, perfect order accuracy and pricing accuracy.

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