Reducing supply chain costs has long been a goal of many hospital administrators. In the healthcare industry, many point the finger at the rise in medical supply costs; however, another factor accounts for approximately $765 billion each year - supply waste.
According to a study conducted from the University of California - San Francisco, $1,000 in wasted resources for each case was found in its neurosurgery department, accounting for nearly $3 million in estimated annual costs. That’s just $3 million wasted in one department at one hospital.
So why so much waste in hospital supplies?
The truth is supply chain management isn’t easy. Administrators have to balance ordering enough supplies to meet the demand of nurses and doctors but not so much that it takes up a lot of space or exceeds the budget. Luckily, there are steps that can be taken to improve hospital supply management.
Consider Automation and Hospital Inventory Management Technology
How do you track your inventory? Is it the most efficient process possible? If you haven't already, you should consider adopting a more sophisticated digital platform with a forecasting feature to properly manage supply and future demand.
Supply tasks such as counting inventory can be very time-consuming when done manually. Manually counting inventory is not only slow but presents a greater risk for human error.
Adding automation could provide huge savings for hospitals. According to Health Care Business Tech, a survey given to supply chain administrators estimated that facilities could save an average of $500,000 by investing in more high-tech supply chain technology solutions such as data analytics and RFID tracking (which uses chips in tags that connect with electromagnetic fields to track supplies in real time).
By automating the supply chain, clinicians would spend less time counting and managing inventory and more time with patients.
Create a Supply Chain Council
A supply strategy should align with the company strategy and management of the hospital. A supply chain council should include key administrators, executives, and managers with important roles in the facility.
Each department would be represented to ensure the goals created by the council would be communicated to staff and properly managed. By including executive leadership, decisions will be streamlined and the supply chain will align with the same goals and strategies of the company.
Incentivize Hospital Staff
Each department must be held responsible for their supply control and management. Each clinician’s role in contributing to the hospital inventory management should be well define and tracked. This goes for all healthcare supplies and medical equipment, from gauze pads and bed linens to cardiac stents and drugs.
Managers should welcome clinicians’ ideas and feedback in helping to reduce supply waste. Empowering staff to voice their opinions helps include them in the company’s overall strategy.
Recognition and awards can be given to those departments that meet the supply chain goals monthly. A fun and friendly competition between departments could not only incentivize hitting goals but promote team building as well.
Organize Hospital Supply Rooms
Misplaced hospital supplies cost money.
Making sure that the hospital supply rooms are well-organized and easy to access is essential for proper inventory control. Habits like placing supplies with sooner expiration dates in front, color coding systems, and implementing linear organization patterns help keep things orderly and easy to find.
Upkeep of hospital supply rooms should be maintained on a regular basis and by a few key members. Quarterly re-assessment of supply room organization standards should be done to ensure the current set-up is still efficient.
Re-Examine Providers and Contracts
Hospitals need to evaluate their current contracts and vendor suppliers. What are your biggest priced supplies? Which ones have contracts and which ones don’t? Can any contracts be consolidated?
Adding supplies under one contract (or a smaller number of them) can help to reduce cost by keeping pricing consistent and under control. Also, keeping all contracts in one organized and safe place to easily refer to helps when the time comes for re-negotiation and price comparison.
Does your hospital supply company have your hospital and the needs of your patients’ best interests in mind? Do they provide high-quality products when you need them? Are your orders delivered on time and complete? It is important to also consider their productivity and if they comply with regulatory standards.
Evaluate Supply Needs
Another way administrators can save costs is to further evaluate purchase decisions for big expense items in departments such as orthopedics and cardiology. Each time a department makes a request for a new piece of hospital equipment, the need should be fully evaluated before committing to making the purchase.
Use a questionnaire can help determine a supply’s value relative to cost.
- What will this hospital supply be used for?
- How will this product help patients?
- What are the advantages/disadvantages to using this product compared to others?
- What alternatives exist to this product?
- Why are you choosing to use this particular product?
Re-evaluating your current hospital supply chain processes not only reduces waste but also improves the overall efficiency of the hospital and its staff. As a manager, not only does it make your job easier, but clinicians and doctors won’t have to spend needless time in a supply room or tracking inventory. Instead, they can focus on their number one priority, their patients.