With your price savings gradually disappearing, because we as an industry have wrung the towel dry on this savings category, where are supply chain professionals going to go for their next supply chain expense savings? The answer is supply utilization savings (SUM). However, there are still too many skeptics that believe that supply utilization savings are just not realizable, obtainable, or substantial. For those doubters, here are four ways supply chain professionals can benefit from supply utilization management strategies that hopefully will remove this skepticism:
1. Increase awareness of product, service, and technology (PST) variations: How better to identify changes in your PST consumption, misapplication, or misuse than having volume-centric data to track your commodities before, during, and after they have been purchased. There is no other way to capture these illusive but real savings.
2. Gain insight into your clinical products, services, and technologies’ favorable and unfavorable patterns of use: What if you knew that your endomechanical stapler reloads’ cost per surgical case usage had increased by 33.7% or $148,516 in FY 2020? Wouldn’t you investigate this anomaly to gain insight into why this increase occurred? That’s why SUM is a great early warning system.
3. Uncover unseen product, service, and technology quality issues before they become dangerous: For instance, what if your nursing staff was replacing IV sets more often (e.g., daily vs. weekly) than was medically indicated? Thereby, creating a situation in which your patients could have more IV site infections. This critical information would only surface before it became a danger to your patients if you had a clinical supply utilization management system.
4. Make better product, service, and technology evidence-based decisions: One form of undisputable evidence is statistics showing (volume-centric) increases or decreases over time of a product, service, or technology’s usage. As an example, we have seen a hospital’s Troponin Rapid Diagnostic Test Kits increase (volume-centric) by 27% in FY 2020 with no price increases. This is undisputable evidence that shows that something has changed in this hospital’s Troponin Rapid Diagnostic Test and needs to be investigated. Maybe it is being misused, misapplied, is a value mismatch, or the test is becoming less reliable and the end users are running the tests more often to compare results test to test. However, this information will help you make better decisions about whether this kit is appropriate and meeting your care requirements for your healthcare organization.
Your hospital, system, and IDN’s senior executives are scanning all their labor and non-labor expenses to improve your healthcare organization’s financials for FY 2021. I’m sure you have been asked to contribute to this effort. Considering that your price savings are slowly disappearing, I would recommend that you consider the benefits of prioritizing supply utilization management strategies in FY 2021. I am sure your senior management will reward you for your efforts.
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