U.S. Healthcare Supply Chain Management Market Size, Share & COVID-19 Impact Analysis, By Component (Software, Hardware, and Services), By Delivery Mode (On-premise and Cloud-based), By End-User (Healthcare Providers, Healthcare Manufacturers, and Others), and Country Forecast, 2023-2030

The U.S. healthcare supply chain management market size was worth USD 1.12 billion in 2022 and is anticipated to grow at a CAGR of 14.9% during the forecast period. 

Healthcare supply chain management enables the healthcare system to manage the flow of products from manufacturers to healthcare and e-healthcare solutions providers, including hospitals, clinics, pharmacies, and others. It works on efficient planning, procurement, and distribution of medical products to ensure the availability of the right products at the right time and in the right quantity to meet patients’ needs effectively. The deployment of quality supply chain management in the healthcare industry efficiently minimizes the inventory levels and provides operational profitability to the healthcare system.

The growing pressure on healthcare facilities to reduce costs leads to rising adoption, technological advancements in medical supply chain management solutions, frequent launches of new solutions and services, and the rising need to manage inventory effectively are the major factors driving the U.S. healthcare supply chain management market growth. For instance, according to an article published in March 2023, the deployment of healthcare supply chain management has increased the revenue by around 20% and reduced process costs by 50% for many healthcare organizations.

The COVID-19 pandemic slowed down the growth of the U.S. healthcare supply chain management market in 2020. During the pandemic, lockdown restrictions resulted in supply chain disruption among the manufacturers, which hampered the research and development activities for these products. Furthermore, this disruption also impacted the healthcare facilities in catering for the growing demand for medical services during the pandemic. However, in 2021, the market grew at a substantial rate due to increased adoption of healthcare supply chain solutions strategy to overcome the supply chain challenges faced in 2020.

U.S. Healthcare Supply Chain Management Market Trends

Technology Integration in Healthcare Supply Chain Management to Propel Market Growth

The incorporation of technology and digitalization in healthcare supply chain management is helping healthcare providers address supply chain challenges. Digitalization is further streamlining the process related to the order, demand planning, procurement, distribution, and management of medical supplies and equipment. It also enables the automation of manual processes, including real-time tracking and data capture, providing a touchless process.

Moreover, integrating many technologies, such as artificial intelligence (AI), radio frequency identification (RFID), and others, further supports healthcare supply chain advancements by enhancing inventory management.

• According to an article published in March 2020, Global Healthcare Exchange, LLC, conducted an audit with their healthcare supply chain management solution in a Northeast healthcare facility and found the inventory worth USD 51 million, about which the healthcare facility was unaware. According to the Northeast healthcare facility, they believed that the inventory’s worth was USD 5 million. Thus, technology integration enhances visibility and fills the gap between unpredictable supply and demand.

U.S. Healthcare Supply Chain Management Market Growth Factors

Reduction in the Healthcare Supply Chain Cost is Propelling Supply Chain Management Solutions

The advantages associated with healthcare supply chain metrics solutions, such as inventory optimization, easy demand forecasting, enhanced visibility into inventory expiration, and optimized distribution are leading to waste reduction, improved patient care with limited or no delay in treatment, and significant cost control. The rising efforts toward maintaining the hospital supply chain management process flow and reducing healthcare supply chain cost by integrating healthcare cloud-enterprise resource planning (ERP) with smart healthcare supply chain solutions are encouraging healthcare organizations to adopt these solutions, contributing to market growth.

• For instance, according to an article published in June 2023, the University of Kansas Health System established a clinical supply optimization team. It deployed a clinically integrated supply chain solution that helped the university to save around USD 8 million in a year.

Moreover, enhanced visibility further plays a key role in better patient outcomes by reducing the chances of medical errors caused by incorrect or expired medications being used on patients.

A rising number of healthcare manufacturers, including pharmaceutical and medical device companies, are directly contributing to the market growth due to the increasing adoption of supply chain management solutions. Also, as a part of the end-to-end supply chain ecosystem, the rising number of hospitals and other healthcare facilities is further anticipated to drive the U.S. healthcare supply chain management market growth during the forecast period.

RESTRAINING FACTORS

Rising Cybersecurity Incidents to Restrict the Market Growth

Cybersecurity risks are a significantly growing concern for healthcare organizations using supply chain management solutions. Supply chain management stores sensitive data related to patient and medical supplies, and the high potential for data breaching along with system vulnerabilities is anticipated to limit the adoption of these solutions, further hindering the market growth during the forecast period.

• For instance, according to a news article published in July 2022, during 2021-2022, the number of ransomware attacks had increased to 94%. Also, in 2021, around 66% of healthcare organizations experienced ransomware attacks.

U.S. Healthcare Supply Chain Management Market Segmentation Landscape

By Component Analysis

Based on components, the market is segmented into hardware, software, and services.                                                                                                               

The software segment accounted for the largest U.S. healthcare supply chain management market share in 2022. The segment's growth is attributed to the increasing software developments for healthcare supply chain management and the rising adoption of cloud-based solutions. Also, the advancements in healthcare supply chain management software facilitates the seamless flow of critical medical supplies, contributing to the segment’s growth.

• For instance, in July 2023, Concordance Health Solutions, a supply chain solution provider, announced the launch of Surgence. Surgence is a healthcare supply chain software that connects distributors, providers, and suppliers and provides clear visibility to information related to supply and demand.

By Delivery Mode Analysis

By delivery mode, the market is bifurcated into on-premise and cloud-based.

The cloud-based segment held the largest market share in 2022 and is anticipated to grow significantly during the forecast period. The segment’s growth is attributed to the high flexibility associated with scalability, easy and secure access, cost-efficiency, real-time insights, and others. Also, the increasing strategic alliances among market players are further anticipated to contribute to the segment’s growth during the forecast period.

• For instance, in August 2021, e2open, LLC, a U.S.-based company providing cloud-based supply chain management software, entered a strategic collaboration with Vizient, Inc. The collaboration aimed to develop a cloud-based, multi-party platform that provides end-to-end visibility between providers and suppliers.

By End-User Analysis

Based on end-user, the market is categorized into healthcare manufacturers, healthcare providers, and others.                                                                                       

The healthcare providers segment accounted for the largest market share in 2022 and is anticipated to register a notable CAGR during the forecast period. The major factors, such as increasing investment and rising adoption of supply chain solutions by healthcare settings, drive the segment growth.

• For instance, in January 2022, Prisma Health, South Carolina's private, non-profit healthcare system, announced the integration of its cloud-based data management solution with Global Healthcare Exchange, LLC. The integration helped to reduce the manual intervention cost by 80%, and Prisma Health won ECRI’s annual healthcare supply chain achievement award.

List of Key U.S. Healthcare Supply Chain Management Market Companies

Companies including Oracle, Tecsys Inc., Global Healthcare Exchange, LLC., and McKesson CORPORATION accounted for significant market share in 2022. The key factors driving the market growth include rising acquisitions among market players and healthcare organizations, growing investment in the supply chain by healthcare organizations, and rapid growth in the overall information technology industry.

• For instance, in April 2023, Global Healthcare Exchange, LLC announced the acquisition of Prodigo Solutions, Inc. The acquisition aimed to simplify the procure-to-pay process and patient-centred business for healthcare providers.

Moreover, companies, including Ascension, Banner Health, Epicor Software Corporation, and others, are expanding through multiple strategic initiatives, such as collaboration, partnership, and merger & acquisition, among others.

• For instance, in August 2022, Terso Solutions, a U.S.-based healthcare supply chain management solution provider, entered into a partnership with PAR Excellence Systems, Inc. The partnership aimed at integrating their technical know-how to develop innovative and automated solutions for healthcare inventory management.

LIST OF KEY COMPANIES PROFILED:

• Oracle (U.S.)


• Tecsys Inc. (Canada)


• Global Healthcare Exchange, LLC. (U.S.)


• Ascension (U.S.)


• Ochsner Health (U.S.)


• Banner Health (U.S.)


• Henry Schein, Inc. (U.S.)


• McKesson CORPORATION (U.S.)


• Cardinal Health (U.S.)


• Epicor Software Corporation (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• August 2022 - Global Healthcare Exchange, LLC announced the launch of a consulting service in order to expedite the clinically integrated supply chain, which helped hospitals and healthcare systems improve performance.


• February 2022 – Cardinal Health entered into a partnership with Kinaxis Inc., a software company. The partnership aims to enhance the former company’s medical supplies’ visibility by using the Kinaxis Inc. RapidResponse platform.


• June 2021 - Ochsner Health entered into an agreement with Medline Industries, LP. The agreement aimed to formulate new strategies to enhance and streamline the supply chain operations of Medline Industries, LP.

REPORT COVERAGE

The U.S. healthcare supply chain management market report provides a detailed analysis of the market. It focuses on key aspects, such as pricing analysis, technological advancements, and key market trends. Additionally, it includes new product launches, key industry developments, such as mergers, partnerships, & acquisitions, and the impact of COVID-19 on the market. Besides this, the report also highlights key industry dynamics.

Report Scope & Segmentation