Perspectives

How digital solutions will aid in optimizing the healthcare supply chain

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Jack Freeman

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Justin Kelly

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Andrew Bartusiak

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Nicky Johnson

April 12, 2023

Digitizing the healthcare supply chain. digital tranformation.

The COVID-19 pandemic caused health systems to rapidly adapt, yet they ran out of critical supplies like gloves, PPE, and N95 masks. As with many industries we invest behind at PeakSpan Capital, this was not a point in time dynamic but rather reinforced the need to optimize healthcare supply chains longer term.

This shortage, along with uncertain patient volumes and inflation, has clearly emphasized the need for a more efficient, and strategic digital supply chain across the entire healthcare ecosystem.

If we really want to pull the aperture back, let’s consider some of the biggest trends we are seeing in healthcare, the aging population and chronic disease:

· AGING POPULATION: Between 2015 and 2050, the proportion of the world’s population over 60 years will nearly double from 12% to 22%. In the US, there are more than 46 million adults aged 65 and older; by 2050, that number is expected to grow to almost 90 million.

· CHRONIC DISEASE: According to the National Association of Chronic Disease Directors, 60% of Americans live with at least one type of chronic health condition. Cardiovascular disease, for example, is responsible for more deaths per year in the U.S. than any other cause.

Both of these trends represent major catalysts for remote patient monitoring technologies and with that, supply chains are being put to the test. With care being more decentralized, we will have to rethink and retool the infrastructure currently in place which traditionally serves more centralized hospital systems.

The icing on the proverbial cake (as seen across all supply chains), is the labor shortage, placing greater stress on health systems.

An HBR article on the digital transformation of health systems mentioned:

· A hospital spends $12 million annually or roughly 35% of total operating expenses on its supply chain. 35 PERCENT!

· The opportunities for optimization are massive, this same article noted that costs can be optimized by 50% and further, a potential revenue uplift of 20%may be realized through process and inventory optimization.

Furthermore, data from Premier Inc’s AI tool, Pinc AI discovered:

· Hospital pharmacies spent an additional $1.1 billion in 2021 to pay for substitutes of essential medicines.

· Product backorder rates have increased by over 100% compared to 2019 pre-pandemic levels.

The stakes are too high, especially with the healthcare supply chain market projected to reach $3.3 trillion in 5 years with a CAGR of 7.9%, Health systems need to invest in their supply chains just as much as your traditional CPG company does (if not more!)

The primary benefits of digitization would be:

· Accurate Inventory & demand forecasting using modern technologies like AI and ML has resulted in improvements of inventory accuracy by 90–95%and a reduction in costs by 20–30% (Grand View Research)

· Better cost optimization through analyzing actionable data points to help assist in negotiations, driving price parity, promoting more standardization, and controlling costs.

· Facilitating collaboration between healthcare providers, suppliers & manufacturers to further identify opportunities for improvement by providing higher visibility into the supply chain.

For all healthcare providers, to future-proof your supply chains — develop a comprehensive digitization plan > choose the right tools & technologies > integrate data from all stakeholders > provide training to staff > start making data-backed decisions > automate proven processes.

About Jack Freeman

Jack has worked with growth-stage technology businesses his whole career and has partnered with over 25 portfolio companies at PeakSpan. He currently leads PeakSpan’s FinTech and Supply Chain investment themes. Jack was named to GrowthCap’s Top 40 Under 40 Growth Investors List in 2025. Prior to joining PeakSpan, Jack worked at Stackpop, an early-stage startup, where he helped build a SaaS spend management platform that enabled CTOs and IT teams to buy and manage internet infrastructure. After Stackpop was disrupted by AWS, Jack joined Macquarie Capital, where he spent three years executing software M&A and capital markets transactions for technology businesses.

Jack holds a B.A. in Economics from Middlebury College. Prior to Middlebury, he played Division I soccer at Seton Hall University and for the New York Red Bulls U-23 team. Jack lives in Larchmont, NY, with his wife and two dogs, Willow and Leeuwen. Once a year, Jack captains a team in a charity bike ride to the Hamptons to support his brother’s autism program, Quest, where he has raised over $100K. Since retiring from collegiate soccer, Jack has become an avid endurance athlete, completing five of the “Big Six” World Marathon Majors (London remaining), an Ironman, and a 50-mile ultramarathon. He is currently focused on improving his marathon time from 2:32:30 to sub-2:30.

About Justin Kelly

Justin joined PeakSpan Capital in 2022 and has made investments across the firm’s Digital Health, FinTech & Payments, and Customer Experience Management themes. Today, he leads PeakSpan’s Digital Health practice and co-leads the firm’s FinTech & Payments coverage. Prior to joining PeakSpan, Justin invested in early- and growth-stage businesses across healthcare, insurtech, and vertical software at AXA Venture Partners. Justin started his career as an investment banker at Houlihan Lokey, where he worked on M&A and private financing transactions in software and tech-enabled services. Justin graduated with honors from the University of Pennsylvania, where he earned a B.A. in Political Science. Outside of work, he enjoys playing tennis, hiking national parks with his brothers, and rooting for the New York Knicks.

About Andrew Bartusiak

Andrew is a proud Yinzer (AKA a Pittsburgh native) who joined PeakSpan in 2019 after interning in 2017 and 2018. He studied finance with a minor in biomedical engineering at Carnegie Mellon University, where he played football for four years, was fortunate to be selected as captain, and ran the venture capital club, Scottie Ventures. He is proud to be the older brother to two younger sisters, Taylor and Midson, and his younger brother, Brady. Outside of work, Andrew enjoys playing D&D, reading sci-fi and fantasy novels, and spending time with his beagle, Theo.

About Nicky Johnson

Nicky joined PeakSpan Capital in 2022 and has since worked closely with 10+ growth-stage software and technology businesses across PeakSpan’s Digital Health, Customer Experience Management, and PropTech portfolio coverage, currently serving as a Board Observer for Lula and Lendware. Prior to joining PeakSpan full-time, Nicky worked at Spurrier Capital Partners (acquired by Lincoln International), supporting B2B software M&A and private financing transaction advisory.

Nicky is an avid reader and holds a B.A. in English, with minors in Math and History, from Middlebury College, where she graduated summa cum laude with departmental and thesis honors. At Middlebury, Nicky was a member of the women’s cross country and track and field teams, earning multiple All-American honors during her time as a Panther. In her free time, Nicky can often be found running along the West Side Highway or in Central Park with friends, planking on the Megaformer at SLT, critiquing a new “must-try” restaurant, or jetting off to a new destination (despite her previous expedition’s suitcase still sitting packed on her apartment floor).

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