Healthcare Supply Chain Top 25

November 29, 2016 Ken Klaver

Intermountain Healthcare Takes No. 1 Slot in the Eighth Annual Healthcare Supply Chain Top 25 Ranking.

Gartner, Inc. has released its eighth annual Healthcare Supply Chain Top 25 ranking. The ranking recognizes companies across the healthcare value chain that demonstrate leadership in improving human life at sustainable costs.

"Leaders in healthcare realize that the patient and demand-driven concept is the alignment of the supply chain to the customer need that it ultimately fulfills," said Stephen Meyer, research director at Gartner. "One aspect of being patient and demand driven is already universal in the industry — every player in the value chain is aware that there is a patient requiring care at the end. Leading organizations understand satisfying a customer is more than just treating a patient's disease or condition. Patient expectations of treatment cost, location and convenience are an opportunity that leaders from all industry segments are using to define their supply chains."

Intermountain Healthcare took the top spot in the Healthcare Supply Chain Top 25 for 2016 after two years at No. 3 (see Table 1). Intermountain Healthcare's journey to the top is the culmination of strategy, talent and capital coming together in a sustained effort to transform its supply chain. The provider delivered on an initiative to standardize across 62 clinical product categories with alignment and buy-in from the C-Suite. That effort generated $24 million in savings in clinical commodity products.

The company also strengthened its Intalere acquisition, building the Intermountain Committed Contracts Program that aims to leverage IM's strength in direct sourcing as a new offering. Service is also a priority as the company expanded its vision for its Supply Chain Operations Center to include medical devices and a rise in service levels to 99 percent on commodities.

The Healthcare Supply Chain Top 25 for 2016

2016 Rank

Company Name

Three-Year Weighted ROA (2013 to 2015)1

One-Year, End-of-Year Inventory Turns (2015)2

Bond Rating3

Truven 15 Health Systems Study4

Peer Opinion5 
(101 voters)

Gartner Opinion5 
(20 voters)

Composite Score6A,6B

1

Intermountain Healthcare

 

 

AA+

Top Quintile

1095

267

8.67

2

Cardinal Health

4.2%

10.8

 

 

1392

290

8.59

3

Mayo Foundation

 

 

AA

15 Top

922

277

8.45

4

Mercy

 

 

AA-

15 Top

679

258

7.29

5

McKesson

3.4%

11.7

 

 

824

275

7.17

6

Owens & Minor

3.5%

9.1

 

 

925

226

6.54

7

CVS Health

6.0%

9.1

 

 

762

238

6.46

8

Johnson & Johnson

11.6%

2.7

 

 

1377

189

6.36

9

AmerisourceBergen

0.6%

13.6

 

 

540

196

5.56

10

Cleveland Clinic

 

 

AA-

2nd Quintile

788

132

5.51

11

Walgreens Boots Alliance

6.2%

8.8

 

 

521

192

5.43

12

Banner Health

 

 

AA-

Top Quintile

312

190

5.38

13

Medtronic

4.1%

2.6

 

 

906

202

5.00

14

Ascension Health

 

 

AA+

3rd Quintile

273

224

4.89

15

Ochsner Health System

 

 

A-

2nd Quintile

389

188

4.64

16

BD

6.3%

2.9

 

 

690

194

4.63

17

Novartis

10.7%

2.8

 

 

457

184

4.29

18

Pfizer

6.3%

1.3

 

 

598

193

4.11

19

Advocate Health Care

 

 

AA

2nd Quintile

287

100

4.00

20

Amgen

8.6%

1.7

 

 

478

182

3.98

21

BJC HealthCare

 

 

AA

3rd Quintile

508

79

3.86

22

Henry Schein

8.2%

5.0

 

 

353

133

3.83

23

Duke University Health System

 

 

AA

2nd Quintile

411

73

3.81

24

Roche

13.4%

2.0

 

 

318

148

3.64

25

Abbott

8.2%

3.4

 

 

722

62

3.56

 

Notes:
1 ROA:
 ((2015 net income/2015 total assets) x 50%) + ((2014 net income/2014 total assets) x 30%) + ((2013 net income/2013 total assets) x 20%)
2 Inventory Turns: 20145 cost of goods sold/2015 inventory
3 Bond Rating: All ratings were mapped to the Standard & Poor's (S&P) rating system using an industry-standard mapping system
4 Truven 15 Top Health System Study: Based on score in Truven Health Analytics’ 2016 15 Top Health Systems Study
5 Peer Opinion and Gartner Opinion: Based on each group’s forced-rank ordering of performance to Gartner’s Healthcare Supply Chain Capabilities Model
6A Composite Score, Health Systems: (peer opinion x 35%) + (Gartner opinion x 35%) + (Bond Rating x 15%) + (Truven ranking x 15%)
6B Composite Score, Nonhealth Systems: (peer opinion x 30%) + (Gartner opinion x 30%) + (ROA x 20%) + (Inventory Turns x 20%)
2015 data used where available. Where unavailable, latest available full-year data used.
All raw data normalized to a 10-point scale prior to composite calculation.

Source: Gartner (November 2016)

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About the Author

Ken Klaver

Ken Klaver governs ControlPay’s social media strategy, while developing brand awareness, generating inbound traffic and encouraging product adoption. On a daily basis, Klaver manages all social channels of CP, writes blogs, creates infographics and maintains a daily news page regarding the most relevant logistics and supply chain topics.

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