In this section:

Texas Health invests in supply chain resiliency, sustainability and diversity measures to consistently deliver products and services that contribute to quality care.

Resiliency

The global healthcare supply chain faces ongoing disruptions due to shortages in manufacturers, raw materials, products and drugs, leading to delays in accessing critical materials. To maintain a consistent supply of essential resources, Texas Health strategically works with suppliers in various geographic locations and sources from domestic companies where possible. We also proactively invest in key manufacturers for a continuous and reliable supply of essential goods.

To keep materials readily available, we regularly monitor our suppliers' manufacturing and distribution capacities while maintaining well-stocked on-site inventories. Texas Health holds a stake in a group purchasing organization to control costs, which rank as the second highest after labor. This affiliation enables us to procure high-quality materials at more cost-effective prices, contributing to our commitment to efficient resource management.

2023 Highlights

Texas Health:

  • Focused on succession planning and upskilling its workforce in response to persistent labor challenges in the supply chain.
  • Continued to drive supply chain value despite strong inflationary headwinds.

Standards and Expectations

To help identify vulnerabilities and potential disruptions in the supply chain, Texas Health annually assesses new and existing suppliers on approximately 30 criteria, including cost, quality, responsiveness, supply assurance, and environmental and labor practices. This evaluation aims to prevent delays, elevate the quality of the materials we procure, and advance responsible business practices.

Our stringent standards mandate that suppliers not only comply with laws but also adhere to ethical practices, meeting our cost, quality, safety and overall satisfaction criteria. In instances where improvements are necessary, we develop collaborative action plans and monitor the progress being made. If challenges persist, we may adjust or terminate contractual relationships.

While resource constraints delayed the development of a scorecard to examine supply chain environmental, social and governance (ESG) risks more deeply, these will be assessed in 2024.

Supplier Diversity

Texas Health sources products and services from minority- and women-owned businesses (MWOBs) to advance inclusion and innovation, facilitate economic development and strengthen supply chain resiliency. Please see the 2023 Diversity, Equity and Inclusion Transparency Report for details about our approach.

Shared Savings

Texas Health shares its supply chain expertise and cost savings with healthcare organizations nationwide through its for-profit subsidiary OnHand®, which operates jointly with Premier, Inc. OnHand offers members free access to a portfolio of procurement and inventory management solutions and discounted purchasing contracts. These strengthen the supply chain resiliency and financial sustainability of OnHand’s members and owners while reducing administrative burdens and associated costs for contracted suppliers.

2023 Highlights

OnHand:

  • Expanded its reach, adding more than 130 new members in 42 states.
  • Refined its brand and launched a new website enriched with analytical dashboards, product surveys, business cases and change management plans. 
  • Received the Vendor of the Year award from the Texas Ambulatory Surgery Center Society.