Gartner, Inc. has released its 14th annual Gartner Healthcare Supply Chain Top 25 ranking. The ranking focuses on U.S.-based health systems and includes an environmental, social and governance (ESG) measure for the first time. This year, increasing financial pressures was identified as a key challenge weighing on healthcare chief supply chain officers (CSCOs).

“While in years past we have seen an emphasis on cost and efficiency related to capabilities, this year is different,” said Eric O’Daffer, vice president analyst with the Gartner Supply Chain practice. “Costs are higher and margins are decreasing. The expectation is for supply chains to drive cost savings, while simultaneously adding services and increasing resiliency.”

In this year’s ranking, Cleveland Clinic takes the top spot with the highest overall peer and analyst opinion scores. Banner Health, Corewell Health (formerly Spectrum Health/BHSH), Advocate Aurora Health and Ochsner Health round out the Top 5 (see Table 1). Four healthcare providers make their debut in the 2022 ranking: Stanford Health Care, Allina Health, CommonSpirit Health and Sutter Health. Providence returned to the ranking for the first time since 2018. 

“In its second consecutive year in the number one position, Cleveland Clinic continues to demonstrate leadership in many facets of supply chain,” O’Daffer said. “This includes their work on supply chain initiatives focused on supplier diversity, clinical integration, a resiliency program and workforce optimization.”

In its fifth year, the Healthcare Supply Chain Top 25 Masters recognizes sustained supply chain leadership at health systems. This recognition is awarded only to supply chains that have achieved a top-five score at least seven times in the past 10 years.

“Mayo Clinic and Intermountain Healthcare maintained their leadership positions as Masters for the fifth year in a row,” said O’Daffer. “This year, they showcased innovative approaches in areas such as cost optimization, ESG and a commitment to supply chain resiliency.”

Table 1: The Healthcare Supply Chain Top 25 for 2022

Notes:                                                                                                           
¹ Bond Rating: All ratings were mapped to the S&P rating system using an industry-standard mapping system.     
² Merative (formerly IBM Watson Health) 15 Top Health Systems Study: Based on score in Merative's 2022 15 Top Health Systems Study
³ Peer Opinion and Gartner Opinion: Based on each group's forced-rank ordering of performance to Gartner's Healthcare Supply Chain Capabilities Model
⁴ ESG Metric: Based on engagement level with the Healthcare Anchor Network as outlined in our Methodology section.
⁵ Composite Score: (Peer Opinion × 30%) + (Gartner Opinion × 30%) + (Bond Rating × 15%) + (Merative Score × 20%) + (ESG x 5%)
All raw data normalized to a 10-point scale prior to composite score calculation.
Composite scores rounded to two decimal places. Rank order based on detailed scoring.

Three primary themes were observed among health systems in this year’s ranking:

Aligning to Increasing Financial Pressure
Financial pressures are weighing heavily on healthcare supply chain leaders, more so this year than in previous rankings. This is in large part a result of increased expenses associated with COVID-19 surges and a lack of COVID-19 relief funding that severely impacted hospitals and health systems through the first half of 2022. Rising inflation rates, additional costs for resiliency and the need to invest in technology, people and processes for the future are also causing financial strain.

“Addressing financial pressures is the number one issue facing health supply chain leaders,” said O’Daffer. “This is a challenge we don’t expect to lessen soon. To address the situation, health systems should focus on building traditional financial improvement initiatives, collaboration with suppliers for cost savings and furthering cooperation with clinicians on standardization initiatives through integrated value analysis programs.”

Sustaining and Building Risk and Resiliency Capabilities
Despite growing pressure to cut costs, the majority of health systems in this year’s ranking are continuing to put an emphasis on risk and resiliency planning and execution. In terms of capabilities, health system supply chains have moved from the pandemic reaction phase to the planning and investment phase, with many now having a fully staffed risk and resiliency leader on par with functional leaders in sourcing, logistics, clinical alignment and analytics.

ESG Becoming a Supply Chain Imperative
This year, Gartner has introduced an ESG measure to the quantitative metric. Twenty-eight percent of health systems in the Top 25 received a perfect score in the ESG metric, and 60% received some credit. Initiatives health systems in the ranking are undertaking include increasing supply spend from diverse vendors and adding goals for their sourcing teams to measure this spend.

“Some question supply chain’s long term commitment to ESG. However, we are seeing ESG initiatives take hold in today’s supply chain and view these initiatives as an integral part of the future of health systems. Health supply chains that are lagging must embrace ESG as an opportunity to help lead their health system to a more inclusive environment, be an effective citizen of the world and serve as an example for others,” O’Daffer concluded.

Gartner clients can read more in “The Healthcare Supply Chain Top 25 for 2022.”

More detailed analysis is available in the report “The Gartner Healthcare Supply Chain Top 25.” Additional analysis on the Healthcare Supply Chain Top 25 is also available in the complimentary Gartner webinar.

About the Healthcare Supply Chain Top 25 Methodology
The Healthcare Supply Chain Top 25 ranking is derived from two main analyses: quantitative measures and opinion components. Quantitative measures provide a view into how companies have performed in the past and establish proxy connections between financial health, quality of patient care, ESG and supply chain excellence. The opinion components offer a qualitative assessment of value chain leadership and demonstrated supply chain performance — crucial characteristics of our Top 25. The qualitative and quantitative components are combined into a total composite score.

About the Gartner Supply Chain Practice
The Gartner Supply Chain Practice provides actionable, objective insights for supply chain leaders and their teams, so they can respond to disruption and innovate for the future through leading-edge supply chain management practices. Additional information is available at https://www.gartner.com/en/supply-chain. Follow news and updates from the Gartner Supply Chain Practice on LinkedIn and Twitter using #GartnerSC. Visit the Supply Chain Newsroom for more information and insights.