The NHCL “Hub” replaces all other forms of distribution in the healthcare supply chain, and becomes a LEAD LOGISTICS PROVIDER which is a valuable tool, successfully employed in other industries. Launched eight years ago by NHCL, it is only now that this concept is being recognized as the future for IDNs.

There are substantial savings possible through the Hub & Spoke Program. The Hub/ISC distributes roughly 90% of the repetitively purchased medical products and other supplies used by the hospitals, clinics, and other facilities within the IDN. This 90% represents previous distributor and direct manufacturer purchases.

With the establishment of the Hub/ISC, the hospitals phase out their internal storerooms, and the Hub/ISC delivers each individual department’s order in low unit of measure. The individual orders are transported to the respective hospitals on a scheduled basis (daily or even more frequently).

As the Hub/ISC operations begin, and the first phases of the Implementation Plan unfold, NHCL begins other feasibility studies for potential Spokes. Spokes are support services such as laundry, housekeeping, hazardous waste disposal, food service, forms, etc., that are common to all the hospitals, and that can be cost shared by the entire group. NHCL designs these Spokes to be integrated within ISC, the reengineered logistics system.

1. Savings in labor

2. Savings in transportation

3. Savings in inventory shrinkage

4. Savings from centralizing & outsourcing

5. Savings from reengineering patient procedural trays

6. Savings from standardization

7. New revenue generation