3 Most Critical Mistakes Hospitals, Systems, & IDNs Are Frequently Making with Their Supply Utilization Management

Hospitals, systems, and IDNs are saying they are attacking their utilization misalignments (i.e., wasteful and inefficient consumption, misuse, misapplication, and value mismatches in their supply streams), but are they really maximizing these savings or just scratching the surface? Here are three reasons we believe healthcare organizations of all types, sizes, and missions are just scratching the surface:

1. Thinking that their value analysis and contracting functions are catching all their utilization misalignments: For the most part, value analysis professionals and strategic sourcing managers are focused on price, suitability, and standardization of the commodities they are evaluating. They spend little or no time considering how these products, services, and technologies are being utilized, when in fact, this is the ideal time to compare the utilization patterns of these same products, services, and technologies that are under evaluation. This is how you can maximize your utilization savings.
2. Thinking that GPOs have a solution that will open the door to your utilization savings: Your GPOs are talking a good game, but do they really have the proven methodology to attack your utilization misalignments? The answer is no. Therefore, you need to buy, rent, or develop your own utilization management system to rein in these multi-million-dollar overspends or live with your meager savings results.
3. Searching for evidence to support supply or value analysis product, service, or technology changes, when your own utilization data is one excellent source for this information: One of the keys to identifying “best value” products, services, and technologies is to compare your own utilization data to your peers’. For instance, if you are considering changing to a lower cost cardiac catheter, what is your current and proposed utilization per procedure of this product? This metric is your true cardiac catheter running cost that needs to be employed to either build a case for change or not on this commodity.

Let’s be honest, most healthcare organizations are only scratching the surface on their utilization savings because of these three reasons. Why not reinvent what you have been doing to wring the towel dry on these unneeded and unwanted costs? Otherwise, as an industry, we will continue to give lip service to this best practice.