Trucking is Essential to Affordable Health Care

Trucking is Essential to Affordable Health Care

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Health care logistics is an important niche segment in the trucking industry that requires specialized facilities, equipment and personnel. To meet the exacting demands of medical suppliers, practitioners and patients, this specialized sector of the transportation industry must operate within a highly controlled environment. The importance of qualified logistical services cannot be overstated, as without it the entire health care system would collapse within days. Even though the demand for qualified transportation in this sector is high, it is an exceptionally controlled service that proves difficult for trucking companies to sustain profitable operations. To help manage the fiscal obligations needed to support operations, many trucking companies are utilizing the cash flow benefits of freight factoring to ensure steady and reliable access to operating funds.

Health Care Costs are Growing

Health care availability, quality and costs endures as high profile topics of interest. The debate on affordable universal health care continues to rage in the hearts and minds of politicians and the public at large. The overall factor that dominates these discussions is cost. Health care spending is rising at an alarming rate in the United States. Spending was pegged at $9,086 per capita in the U.S. in 2013. Three years later when the final bills are tallied, the costs for 2016 are expected to top $10,000 per capita, an historic high. Costs are projected to grow an average of 5.8 percent per year from 2015 to 2025.

According to Maya MacGuineas, president of the Committee for a Responsible Federal Budget, health care spending is growing at a quicker pace than the economy. Despite much effort and some progress at reining in costs, research and development costs have quadrupled in recent years. Increasing regulation, product security concerns and supply chain inefficiency contribute to the ballooning costs. Health care businesses that traditionally benefited from comfortable profits are now facing severely tightened margins. In this difficult environment, health care businesses have started to seek areas where they can save money. Improving logistics management is becoming a priority task and a growing role in this effort.

Controlling the Costs of Trucking

The top ranking supply chain concern among health care companies is regulatory compliance. Adhering to a multitude of environmental, trade, security and safety regulations is the primary challenge that often overwhelms in-house expertise. To alleviate this issue, many health care companies are outsourcing compliance to a 3rd party logistic management company. Efficient compliance with regulatory parameters is a key factor in controlling costs and expediting the timely delivery of medical supplies. To help facilitate regulatory compliance, the U.S. Food and Drug Administration (FDA) and U.S. Customs and Border Protection (CBP) are striving to computerize and streamline operations to support contemporary business practices.

Inefficient delivery systems and supply chain processes are other significant factors that drive the costs upwards. While other industries have implemented improved procurement processes, the health care industry lags far behind. Health care manufacturers, distributors and providers suffer large error rates due to outdated procurement processes while other industries have implemented product scanning, electronic ordering and other key practices to improve supply chain efficiency. Across the health care system, providers are spending over 30% of their annual operating funds to support the supply chain. Efficiencies gained in this sector of the industry would lead to significant costs reduction in the delivery of health care.

Safety, Integrity and Quality

Doctors, hospitals and pharmacies must have availability to the medical supplies needed to help their patients without delay or compromise. The controlled transportation of medical supplies to ensure safety, integrity and quality is paramount to maintaining the usefulness of the drug or equipment. From the point of production to the point of delivery these medical supplies need to be highly regulated and controlled. It takes an educated supervision team, experienced drivers and handlers, dependable data exchange, accurate documentation, suitable storage facilities, and temperature controlled freight carriers to properly manage the logistics of medical goods and services.

Reliable Funding Leads to Higher Efficiency

Trucking is by nature a challenged industry. High operational costs, low margins and intense competition are just a few of the roadblocks that hinder this critically important industry. Of all the market pressures that threatens the very existence of a sustainable trucking company, the growing driver shortage has the most impact. To face this ongoing crisis, trucking companies are employing various strategies to recruit and retain skilled, professional drivers. The ability to provide steady work and a regular pay check is key to building a strong driver pool. Access to working capital is essential to support driver wages and daily operations. To ensure dependable access to working capital, freight factoring has become a mainstream financial strategy for trucking companies seeking steady cash flow. With reliable funding, trucking companies are able to manage the ongoing expenditures of a specialized fleet servicing the stringent demands for cost effective health care. More importantly, they have the means to support improved work practices and to maximize equipment utilization in an effort to reduce the cost of service.

Improved efficiency within the transportation system is a key element in the ongoing challenge to deliver affordable health care to the general public.



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