Time for a Supply Chain Refresh? These Tips Can Help

Brett Weiss
By: Brett Weiss
Date: May 26, 2020

supply chain refreshHospitals and healthcare organizations face the increasing challenge of managing escalating costs while striving to deliver exceptional patient experiences. Looking to the supply chain and using data can help organizations identify waste and opportunities to trim costs. Connecting supply chain data with labor and other expenses provides more accurate insight into what it costs to treat a patient, linking care to quality. It also ensures that the hospital is equipped with the right materials, where and when they’re needed, especially important in the wake of the global pandemic.

Many hospitals are running legacy technology with supply chain data that is not integrated with patient, clinical, revenue cycle management, or other financial data. Without a single view of the truth, hospitals will continue to struggle with understanding the impact of the supply chain on cost, quality, safety, patient outcomes, reimbursement, process efficiency, and other factors.

Optimizing the supply chain around patient outcomes requires aligning patients, professionals, and technology systems. Organizations with visibility into the total cost per patient – not just the salaries of doctors and nurses but the cost of drugs, lab tests, medical supplies, and other services– can use data to drive improvements. Making an upfront investment in systems that connect data and a commitment to business process change can help drive a patient-centered supply chain and help hospitals provide higher quality care at lower cost.

Part of post-COVID-19 response will be looking at operations and where there are opportunities for improvement. Given all the changes, how can hospitals adjust? Look at your supply chain and ask:

Are EHR and ERP systems integrated?

Integrating information systems that connect patient conditions and patient care to inventory systems that control where supply is located and preferred supplier-contractor relationships can reveal opportunities for cost-cutting. For example, why does the same procedure cost more by one surgeon than another? Are there differences in the cost of bandages, implants, or devices used? Were redundant or unnecessary lab tests ordered? Were certain supplies unavailable because current inventory sat on a shelf too long and expired? Understanding supply costs and impact on care quality can help hospitals create a standard of care to reduce excess spending. Better understanding of actual procedure costs can also help with contractor and insurance company negotiations.

Do you have access to analytics?

Tracking care to quality is often a challenge because data resides in silos. Connecting clinical, supply, and financial functions can help predict and anticipate supplies and resources that are needed to care for patients and ensure inventory aligns with demand. Analyzing data can reveal patterns such as a supply room that runs out of saline solution frequently or high-value items that are ordered automatically but shouldn’t be, either because they’re expensive or have specialized uses.

Can you identify areas of waste or hoarding?

With merger and acquisition activity rampant, many hospitals find inventory dispersed across locations. Centralized inventory control and distribution can help organizations leverage efficiencies, reduce waste, and negotiate more favorable supplier contracts.

Is it time to automate?

One of the primary obstacles preventing organizations from maximizing savings is the complexity of the ordering process. Automating your procurement can reduce time spent placing and completing orders as well as getting the best products and supplies to your front-end team faster.

Making small adjustments now can help a long way down the line in improving operations and reducing supply chain spending. Getting lean now can help you do more for the future.

Avaap has partnered with Stryker to automate the procurement process for healthcare organizations running on Infor (Lawson). With FullFill ProcurementTM, users can submit one purchase order (PO) in the Infor system for automatic order reprocessing and OEM product fulfillment. Want to learn more? Learn how your organization can lower supply costs with FullFill Procurement in this on-demand session.

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