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Healthcare supply chain vulnerabilities put focus on vendor relationships and payments

March 13, 2023
Business Affairs
Elizabeth (Elle) Kowal
By Elizabeth (Elle) Kowal

As in other industries, recent supply challenges have interrupted the flow of essential equipment, medicine and other supplies. But the stakes are higher when it comes to patient care. So, no surprise that in MineralTree’s recent State of Healthcare AP Report, 75% of healthcare AP teams said that the importance of their vendor relationships has grown. And this means they need to do more to meet their vendors’ desire for faster, more accurate payments.

Supply chain instability creates problems for all finance and AP teams. But our research found that invoice processing challenges and delays due to supply chain disruption are 10 percentage points higher for healthcare teams (53%) than other industries (43%). This interrupts the flow of equipment and supplies needed by healthcare organizations to provide quality, uninterrupted care to their patients.

A growing focus on vendor relations
This supply chain turbulence underscores how critical it is for healthcare organizations to maintain strong relations with their suppliers to ensure a steady stream of medical equipment and supplies. In our survey, over 75% of healthcare AP teams agreed/strongly agreed that their vendor relationships have grown in importance over the past year – outpacing other industries by more than five percentage points.

But how exactly can healthcare facilities keep their vendors happy? When asked to identify vendor priorities, speed of payment (85%) is the number one response among healthcare AP teams followed by accurate payments (53%). This aligns with the top responses amongst vendors, who confirm their desire for fast (84%) and accurate (67%) payments. Yet, many healthcare finance teams find themselves burdened by manual invoice processing and payment methods, making it difficult to meet their vendors’ wishes.


Five tips for healthcare finance teams to optimize AP operations to strengthen supplier relationships
AP automation offers healthcare finance teams a way to overcome processing obstacles and deliver on their vendors’ needs for more prompt and accurate payment. Here are five specific ways:

1. Embrace AP automation to assist lean finance teams
A majority of healthcare facilities have automated at least some of their AP processes (61%). Yet only 18% are fully automated, likely due to the extensive efforts required to digitize patient records and other EHR-related initiatives. Over 85% of these teams report gaining efficiencies through automation, which lets them do more with less to overcome pressing staffing issues. More than 65% using automation are able to process more invoices and payments using the same-sized team, and an additional 21% have reallocated freed-up staff time to other projects.

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