Industry Insights | Digital Transformation of Hospital Logistics Services in the Post-Pandemic Era

Industry Insights | Digital Transformation of Hospital Logistics Services in the Post-Pandemic Era

Published: 2023/03/20

行业洞察丨后疫情时代,医院后勤服务的数字化变革
Hospital logistics service

With the increase in the number of hospitals and their modern development, the scope and knowledge base of hospital logistics management services are continuously expanding, and their specialization is deepening.

 

Especially in the post-pandemic era, the quality and efficiency of hospital logistics services have become particularly important. To promote the standardization of hospital logistics services, it is necessary to deeply understand the technical expertise, safety assurance, and economic characteristics of hospital logistics services on the basis of clarifying the scope of hospital logistics services.

 

At the same time, it is necessary to strengthen the integration of hospital logistics management services with the construction of information platforms, increase investment in training hospital logistics service personnel, and provide them with better welfare benefits to improve the level and quality of hospital logistics services. This will promote the sustainable development of hospitals.

 

01

 

Introduction to the Hospital Logistics Service Market

 

1Overview

Hospital logistics service is a type of property management service and an important foundation for supporting and ensuring the normal operation of hospitals. The services mainly include medical care, scientific research, disease prevention, health care, etc. Hospital logistics service providers can provide comprehensive services regarding the operation and management of hospital assets and facilities, as well as basic necessities for patients, including all-round services such as clothing, food, housing, and transportation. They can also offer material supply and equipment support. To provide high-quality and comprehensive hospital logistics services, hospital logistics service providers must possess professional knowledge and strong management and operational capabilities.

 

2Service scope

Hospital logistics services mainly include traditional property management services and value-added services. Traditional property management services mainly include cleaning services, security services, greening and horticultural maintenance, as well as upkeep and maintenance services.

 

The value-added services of hospital logistics mainly include four categories: First, asset and facility management, such as facility procurement management, equipment acceptance and filing, special equipment maintenance, asset inspection and management; second, safety management, such as fire management, hazardous chemical management, emergency event management; third, patient services, such as material distribution, bedding and clothing washing, nursing services, housekeeping services, catering services; fourth, cleaning the surfaces of used medical devices, equipment, and consumables and delivering them to the central disinfection service department.

Source: Analysis by Frost & Sullivan

 

With the development of the hospital logistics service market in China, hospital logistics service providers are applying a range of new technologies such as network technology, Internet of Things technology, big data, and cloud computing technology in various application scenarios including cleaning services, medical auxiliary transportation, patrol, and inspection services. This reduces costs, improves management efficiency, and accelerates the digital transformation of traditional hospital logistics operations that heavily rely on manual labor.

 

To meet the needs of hospitals, leading and experienced hospital logistics service providers can apply information technology to launch comprehensive hospital logistics service systems, providing comprehensive solutions for management, support, and optimization of the entire hospital operation process.

 

Hospital logistics service providers generally charge management fees based on costs. In hospital logistics services, labor costs account for the largest proportion, and companies usually charge management fees according to the number of workers arranged for projects and their wages.

 

02

 

Market scale and development status of hospital logistics in China

 

In recent years, with the increasing number of hospitals, the market scale of hospital logistics services has been continuously expanding. From 2016 to 2021, the total revenue of China's hospital logistics service market increased from RMB 16.4 billion to RMB 33.6 billion, with an annual compound growth rate of 15.4%. In the future, as the requirements for hospital logistics services continue to rise, the market scale of hospital logistics services will continue to grow. It is estimated that by 2026, the total revenue of China's hospital logistics services will reach RMB 611 billion, with an annual compound growth rate of 12.7% from 2021 to 2026.

Source: Analysis by Frost & Sullivan

 

03

 

Driving factors of the hospital logistics service market in China

 

✔  Increase in the number of hospitals

With the continuous increase in fixed asset investment in China's health industry, the total number of hospitals in China has maintained a steady growth in recent years, increasing from about 29,000 in 2016 to about 37,000 in 2021, with an annual compound growth rate of about 5.0%. The continuous increase in the number of hospitals has stimulated the demand for hospital logistics services, and at the same time, it has also brought broad development prospects to the hospital logistics service market in China.

 

✔  Policy support to promote outsourcing of hospital logistics services

The government's support has further promoted the systematization of hospital logistics outsourcing. According to various policies such as the 'Guiding Opinions on Establishing a Modern Hospital Management System' (aimed at improving hospital logistics management systems, exploring one-stop service models for hospital logistics, and promoting hospital logistics service outsourcing), the Chinese government holds a positive attitude towards promoting hospital logistics outsourcing services, supporting and encouraging professional property management enterprises to participate in assisting hospitals with related logistics services. Therefore, the relevant government policies have effectively promoted the development of China's hospital logistics service market.

 

✔  Hospital logistics services are constantly being upgraded

Due to the high standards hospitals typically have for environmental cleanliness and safety, professional facility management, emergency response capabilities, and the ability to handle large and complex patient flows, hospital logistics service providers have been committed to improving these capabilities, enhancing service quality, and expanding their service scope from traditional property management services to value-added services with Chinese hospital characteristics, such as nursing services, medical guidance services, and medical waste disposal services. The continuous improvement of hospital logistics service requirements has also further promoted the enhancement of service standards in the hospital logistics service market.

 

04

 

China Hospital Logistics Service Market

Opportunities and Challenges for Future Development

 

✔  The continuous growth in the demand for hospital logistics outsourcing

With the continuous increase in labor costs in recent years, most hospitals in China have reduced their operating costs by outsourcing non-core services (such as hospital logistics). In providing hospital logistics services, property management service companies with extensive management experience, efficient management methods, and an excellent service team will further intensify their penetration into the hospital logistics service market.

 

At the same time, as the demand for outsourced hospital logistics continues to grow, hospital logistics service providers will establish broader and deeper cooperative relationships with hospitals. With the increasing number of Chinese hospitals outsourcing their hospital logistics services and the continuous expansion of service scopes by providers, it is predicted that the Chinese hospital logistics service market will grow from about 33.6 billion yuan in 2021 to about 61.1 billion yuan in 2026, with an annual compound growth rate of 12.7%.

 

✔  Expansion of the hospital's logistics service scope

As the hospital logistics management system continues to be improved, the hospital's requirements for other related value-added services are also increasing, such as requiring hospital logistics service providers to expand their service scope.

 

At the same time, hospital logistics service providers have been committed to introducing a one-stop service model for hospital logistics that is comprehensive in functionality and diverse in services into hospital logistics management. Based on this, the scope of services has been expanded from traditional property management services to diversified value-added services, including meal delivery services, chauffeur services, and express delivery services.

 

Hospital logistics service providers, which have a relatively strong ability to provide diverse services, will have a relative advantage in the Chinese hospital logistics service market.

 

✔  Widespread application of emerging technologies

On March 11, 2021, the Outline of the 14th Five-Year Plan mentioned 'Promoting the construction of smart communities, relying on community digital platforms and offline community service institutions, to build convenient and beneficial smart service circles, providing online and offline integrated community life services, community governance and public services, intelligent residential areas, and other services', constructing a new picture of a better life and accelerating the process of intelligent development.

 

In addition, with the widespread application of emerging technologies in providing hospital logistics services, hospital logistics service providers can assist hospitals in further improving operational capabilities and achieving a win-win situation.

 

✔  Rising labor costs

Compared to property management service providers, hospital logistics service providers have higher requirements for their employees. This is mainly because employees must understand basic medical and health knowledge when providing hospital logistics services and strictly abide by hospital regulations. At the same time, the hospital logistics service market requires a large workforce to provide traditional property management services, including security, cleaning, maintenance, and other value-added services. Therefore, labor costs are one of the highest expenses for hospital logistics service providers.

 

Rising labor costs may lead to cost pressure and weaken profitability, which is also a challenge for Chinese hospital logistics service providers.

 

05

 

Competitive landscape of the hospital logistics service market in China

 

In recent years, against the backdrop of the pandemic, hospital logistics service providers have combined medical, teaching, and healthcare characteristics with modern management methods to provide better support for the smooth operation of hospitals and patient care.

 

The main participants in the Chinese hospital logistics service market include Runhua Property, Mingzhe Group, Yizhong Gantai, Guotian Jianyu Property,AimaxAs well as companies like Jichen Health.

Source: Analysis by Frost & Sullivan

 

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