June 6

3 Important Things Clinical Supply Utilization Management Can Do for You Besides Save Money


“There are so many aspects to clinical supply utilization that are beneficial to your overall supply chain program.”

You always hear us talk about many aspects of clinical supply utilization which tend to focus on reducing costs, waste, and the inefficient use of products, services, and technologies. There are three key areas that go beyond reducing costs that can greatly aid you in your day-to-day supply chain and value analysis efforts that you need to keep in mind. These are very important as many organizations have hit the wall with major savings opportunities with contract price and are now looking to areas like clinical supply utilization to make this happen. You will want to have a few more aces up your sleeve other than just the cost savings wildcard. Cost savings may not always be a popular motivator alone and you will need to add other aspects to that to show your leadership how dynamic clinical supply utilization can be for your healthcare organization.

What Clinical Supply Utilization Management Can Do For You

1. When Not to Make a Change is Just as Important as Making a Successful Change – A few weeks back a client of ours had a new contract offering for their laundry linen processing that would save them 10% to 20% more a year which their value analysis committee was keen on. Luckily, the supply chain director reached out to me as they have a full supply and purchased service clinical supply utilization reporting with us and asked me if this made sense and if I think the saving are real. I am brought in on a quarterly basis to their VA meetings to report new and bigger savings opportunities and I am as optimistic as anyone but I have never seen any opportunities within their Laundry Linen Processing Cost Per Adjusted Patient Day.

Just in case, I quickly re-benchmarked them to make sure I had the right key performance indictor in place and low and behold they were one of the best in the cohort for a large community hospital. Not only were they one of the best but their adjusted patient days have gone up over the past five years by 45% and their overall spend has remained the same or lower. No need to change here. The proposal would have ended up costing them money to switch and for a massive change like laundry linen they would have lost money at least in the first year. But with great clinical supply utilization numbers in hand, they didn’t need to do a thing.

2. When to Push Back on a New Product Request (NPR) – When I attend value analysis meetings, I often look up our respective client’s overall utilization on the category that the clinician and/or department head is asking for the new product to be added. For instance, I had a hospital that wanted to add another surgical energy instrument to their already 43% too high KPI in that category per surgical case. It was definitely time to push back on that instrument as they are way over cost in that category or at least they need to identify the line items or other instruments that are going to be removed. No hospital can keep running with any cost that is already overstated. Without this knowledge, the costs could be higher than 50% and no one would know, but clinical supply utilization gave the value analysis facilitator the leverage to push back on this particular new product.

3. Can Highlight Quality or Procedural Issues Sometimes when there are cost increases or even very low levels of utilization of a clinical product category you may want to first look at procedural issues that can be happening. If your Wound Care Cost Per Patient Day is extremely low as compared to your cohort KPIs, that may be a red flag. You will want to look into this further as most organizations shouldn’t have incredibly low thresholds that could be causing issues, and perhaps your policy as well as your infection rates should be reviewed.

Another example is that higher cost of blood collection needles could indicate a problem with the product and perhaps the safety functions are firing off requiring a second or third needle when you should only use one or two at the most. Or perhaps you need to bring in your vendor’s nurse practitioner to perform an in-service to improve your nursing and phlebotomist stick proficiency with the newer needles.

Monitor Savings Opportunities and Quality/Procedural Issues with Clinical Supply Utilization Management

There are so many aspects to clinical supply utilization that are beneficial to your overall supply chain program which include reducing costs but also the areas that are more procedural and quality related detailed above. Just keep in mind, clinical supply utilization allows you to strategically monitor all of your supply categories for not only savings opportunities but also quality and procedural issues as well. It is worth it to start your program today.

Below are some similar articles that you may find interesting.

Podcast 80 – Big Savings in Retrospective Value Analysis Reviews

The Best 30-60 Minutes You Can Spend on Any Hospital Value Analysis Project

Value Analysis Teams Need Proof That Savings Are Real in Order to Engage for Big Savings Beyond Price

Request Demo of SVAH’s Value Analysis and Utilization Tools


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