Artificial Intelligence and Implementing AI in Healthcare Procurement

How can AI help in Healthcare Procurement?

AI-driven procurement can streamline many different processes. AI can also help in predicting demand for medical supplies and equipment. The advanced knowledge of incoming trends in demand allows healthcare organizations to better plan and manage their inventory. This can prevent shortages and reduce the risk of stockouts, ensuring that patients receive the care they need when they need it.

Additionally, AI can analyze the supplier performance data to identify trends and patterns. Vendor businesses can be inconsistent in decision making, delivery speed and availability. AI is helping healthcare organizations make more informed decisions when selecting vendors. 

AI can assist in monitoring and tracking the quality of products and services provided by suppliers. Data driven decisions ensure that healthcare organizations are receiving the best possible value for their money. AI can automate routine tasks and provide real-time insights. Through this exclusive level of information gathering, AI can help healthcare procurement teams work more efficiently and effectively.

Integrating AI into procurement allows healthcare purchasing teams to drive greater cost savings, improve efficiency, and drive strategic sourcing. With less on their plate, senior living and healthcare providers can focus on providing the best resident and patient care.

How does DSSI use Artificial Intelligence Technology?

Direct Supply® DSSI™ changed the game from procurement automation to optimization. The platform strives to help healthcare procurement experts utilize technology in a way that humans can’t. We are taking this a step further with AI programming and development. DSSI uses artificial intelligence in procurement and supply chain management to help healthcare organizations by:

1: Boosting efficiency with healthcare procurement software

One way in which the DSSI platform leverages AI to boost efficiency is through its Stock-Outs functionality. The system identifies when a product is not available and suggests a similar replacement in real-time. This saves the user time during their buying process. It also avoids a situation where a customer needs an immediate solution, but doesn’t have an existing “Plan B” product. Overall, this feature prevented over 200,000 stockout situations in 2023.

“Humans can’t efficiently process all the data needed to choose the correct products across multiple suppliers and distribution centers. Product availability also changes often, making management nearly impossible,” says Andrew Novotny, Vice President of Product Development and Engineering for Direct Supply DSSI. 

“It’s an arduous problem for a human to solve. The only way we can solve this problem is to look at new healthcare technology trends within artificial intelligence”.

When it comes to healthcare procurement, there’s constant change with product availability. The entire industry is grappling with inflation and supply chain disruptions. Direct Supply DSSI uses data driven procurement technology to ensure supply consistency. The DSSI platform’s real-time, AI-driven order guide management (OGM) tool groups items accordingly. The viewer is shown the best available price, which is based on the closest food supplier.

OGM.ai™ directly integrates with suppliers’ stock inventory to replace products that are not available with the best available option. No longer do healthcare organizations need to worry about a crucial item being OoS without an obvious replacement. You can truly swap-and-save with Direct Supply DSSI healthcare food procurement!

2: Driving cost savings with machine learning in procurement

The DSSI AI engine examines customers’ ordering behaviors to identify recommended products for healthcare based on their individualized ordering algorithm. Traits from purchased products are analyzed by the AI to determine what features customers value most. The system learns user tendencies to make itself smarter, which Novotny believes is in the spirit of AI.

“We’re creating technology to allow purchasers to order what they need quickly and move on with their day,” Novotny says. A more intelligent AI model, trained on more customer data, will provide the best suggestions to customers.

A strong example of DSSI AI driving optimized purchasing can be found with our tool that redirects purchasers to a contract-compliant product. In 2023, this feature automatically redirected over 40,000 purchases that would’ve otherwise broken contract compliance. This feature helped our customers to maintain compliance with order guides, supplier contracts and relationships.

The DSSI AI tools constantly learn from users’ purchasing behaviors. The system understands the best options for senior living and healthcare organizations. We deliver custom procurement savings for each organization.

There are many benefits to implementing machine learning in procurement optimization. The cost saving opportunities provided by this AI-powered software are a source of significant impact. Businesses can use these opportunities for continuous improvement to upgrade and improve any automated procurement system. 

3: Using AI in spend analytics and procurement cost savings

From a DSSI perspective, Novotny says the two top priorities are enhancing efficiency and helping customers pinpoint savings opportunities. Direct Supply DSSI is using AI and algorithms to aid in rebate processing, a complex relationship between manufacturers, purchasing organizations and distributors. AI can look at all the variable factors of product purchasing and determine a lower price for the organization.

Optimized rebate processing can aid in greater procurement contract compliance. Volumes and contract lengths are another factor. It may be better for healthcare customers to swap from Product A to Product B. Product B might actually be a lower total cost. Even though the initial price might be higher, the rebates based on volume end up making it lower. DSSI’s OGM.ai technology helps to identify rebate processing optimization opportunities and other important contract implications, resulting in $18 million in annualized savings for our customers in 2023.

It’s hard to understand procurement cost savings if you can’t visualize them. The data visualization tools allow senior living and healthcare organizations to actively see their procurement patterns and sourcing processes. Their spend analytics can help connect cost, spend and purchasing for optimal procurement within the healthcare sector.

“Our tagline is always ‘Taking Cost out of Healthcare,’” Novotny says. “How can we find unique, novel ways to remove costs for our end users? AI is just one of our tools to do that.”

The Future of the Healthcare Procurement Process

Novotny believes there will be many AI-related additions to help customers make more streamlined purchasing decisions. Procurement teams and AI researchers are constantly developing new procurement software.  As AI becomes more advanced, it will be able to provide even more valuable insights and recommendations to help organizations make informed decisions. It could even evolve to replace labor in certain roles. 

Integrating AI into your healthcare procurement process can enhance your supplier relationships, operations, decision making and data acquisition. In turn, this will boost your bottom line and make your work easier. The artificial intelligence technology of Direct Supply DSSI can solve your largest healthcare procurement challenges.

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