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Gartner Inc.

Health Care

Gartner Announces Rankings of Its 2015 Healthcare Supply Chain Top 25

Mayo Clinic takes top slot

Published: Monday, November 23, 2015 - 15:28


(Gartner: Stamford, CT) -- Gartner Inc. has released its seventh annual Healthcare Supply Chain Top 25 ranking. The 2015 ranking recognizes companies across the healthcare value chain that demonstrate leadership in improving patient care and lowering costs.

"Alignment to patient outcomes, company strategy, and future revenue models in healthcare are the key themes for 2015," says Eric O'Daffer, research vice president at Gartner. "We see innovation coming from mature supply chains that have stable organizations and strong talent. These organizations are most ready to successfully lead in consolidation and collaboration initiatives that will advance the healthcare value chain."

Mayo Clinic took the top spot in the Healthcare Supply Chain Top 25 for 2015 after three years at No. 2, as seen in the table below. Mayo's supply chain continues to be a model of steady improvement for this $9.8 billion healthcare provider across 22 hospitals and associated care sites in five states. Mayo focuses on the strategic alignment of the supply chain with the cost and quality of patient care through its one-year and five-year rolling strategic plan refresh process. The company has deep partnerships with strategic suppliers/service providers, and Gartner anticipates that Mayo will continue to build supply chain capabilities and innovate for years to come.

Notes:
1 ROA: ((2014 net income/2014 total assets) * 50%) + ((2013 net income/2013 total assets) * 30%) + ((2012 net income/2012 total assets) * 20%)
2 Inventory Turns: 2014 cost of goods sold/2014 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 Health System Percentile Score: Data taken from the Truven Health Analytics 15 Top Health System Percentile Score
5 Peer Opinion and Gartner Opinion: Based on each panel's forced-rank ordering against the definition of "high-quality patient care at an optimal economic cost"
6A Composite Score, Health Systems: (peer opinion * 35%) + (Gartner opinion * 35%) + (bond rating * 15%) + (Truven ranking * 15%)
6B Composite Score, Nonhealth Systems: (peer opinion * 30%) + (Gartner opinion * 30%) + (ROA * 20%) + (inventory turns * 20%)
2014 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 2015)

Cardinal Health dropped to the second spot after a four-year run in the No. 1 spot. As a pharmaceutical wholesaler, medical-surgical distributor, solution provider, and technology company, Cardinal touches almost everyone in the healthcare value chain at some point. Cardinal continues to build on collaborative solutions with healthcare providers, retailers and manufacturers, as well as quickening the pace on acquisitions. Connecting the end-to-end supply chain with more owned manufacturing capabilities keeps Cardinal on the innovation frontier.

Intermountain Healthcare retained the third ranking for 2015 during a year of progress and change. Intermountain is a leader in organizational understanding that investing in supply chain people, process, and technology across all nonlabor spend contributes to the balance of patient care, cost, and profitability.

"The Healthcare Supply Chain Top 25 for 2015 reflects the progress leaders have made in laying the foundation for future success," said O'Daffer. "Supply chain leaders are educating their teams, trading partners, and company leadership on the value of supply chain to improve service, lower costs, and enable growth and sustainable profits."

More detailed analysis is available in the report "The Healthcare Supply Chain Top 25 for 2015." Additional analysis on the Healthcare Supply Chain Top 25 is also available in the complimentary Gartner webinar "Gartner Healthcare Supply Chain Top 25 for 2015."


2015 Rank

Company Name

Three-Year Weighted ROA (2012 to 2014)1

One-Year, End-of-Year Inventory Turns (2014)2

Bond Rating3

Truven Health System Percentile Score4

Peer Opinion5
(88 voters)

Gartner Opinion5
(21 voters)

Composite Score6A,6B

1

Mayo Clinic

 

 

AA

98.26

897

324

8.43

2

Cardinal Health

3.6%

10.5

 

 

1340

310

8.35

3

Intermountain Healthcare

 

 

AA+

93.04

934

292

8.27

4

Owens & Minor

3.6%

9.5

 

 

848

291

6.87

5

Mercy

 

 

AA-

80.00

556

284

6.57

6

CVS Health

6.2%

9.6

 

 

746

242

6.38

7

McKesson

2.9%

11.7

 

 

730

214

6.15

8

AmerisourceBergen

2.3%

13.6

 

 

498

226

5.69

9

Johnson & Johnson

11.1%

2.8

 

 

1118

181

5.63

10

Walgreens Boots Alliance

6.1%

9.0

 

 

447

209

5.29

11

Banner Health

 

 

AA-

83.91

299

191

4.97

12

BD

10.0%

2.8

 

 

822

189

4.96

13

Advocate Health Care

 

 

AA

93.91

267

106

4.35

14

UPMC

 

 

AA-

20.87

619

156

4.24

15

Medtronic

5.7%

1.8

 

 

642

190

4.08

16

Pfizer

8.1%

1.7

 

 

537

194

4.03

17

BJC HealthCare

 

 

AA

43.48

375

114

3.73

18

Henry Schein

8.2%

5.6

 

 

192

157

3.70

19

Cleveland Clinic

 

 

AA-

32.17

627

85

3.67

20

Abbott

6.3%

3.5

 

 

625

106

3.65

21

AbbVie

11.4%

3.9

 

 

271

141

3.61

22

Duke University Health System

 

 

AA

89.57

300

35

3.58

23

Ascension Health

 

 

AA+

26.96

175

158

3.55

24

GlaxoSmithKline

9.7%

1.7

 

 

334

172

3.49

25

Baptist Health South Florida

 

 

AA

90.43

111

68

3.46

About the Healthcare Supply Chain Top 25 methodologies
Consistent with Gartner's Top 25 research methodologies, the Healthcare Supply Chain Top 25 ranking is derived from two main analyses: quantitative measures and opinion. Quantitative measures provide a view into how companies have performed in the past, and establish proxy connections between financial health, performance and supply chain excellence. The opinion component offers an eye to value chain leadership and demonstrated supply chain performance—crucial characteristics of Gartner's Top 25 ranking. These two components are combined into a total composite score.


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Gartner Inc.

Gartner Inc. is an information technology research and advisory company providing technology related insight. Research provided by Gartner is targeted at CIOs and senior IT leaders in government agencies, high-tech and telecom enterprises, professional services firms, and technology investors. Gartner clients include large corporations, government agencies, technology companies, and the investment community. Gartner has acquired numerous companies providing related services including consulting, market research, executive programs, and events.