“Clinical supply utilization management provides an ongoing feed of new savings opportunities – beyond price and standardization.”
If you are not using Clinical Supply Utilization Management (CSUM) for quickly finding and drilling into your next level of savings beyond price, then you should highly consider this. CSUM provides an ongoing feed of new savings opportunities beyond price, but that is not what we are here to talk about in this article today.
CSUM has some hidden gems that it shows you on top of finding new major (and minor) savings opportunities that are vitally important to Healthcare Supply Chain and Value Analysis departments. There is more to managing utilization, consumption, and variation in your Supply Chain that has a net effect on cost, quality, and outcomes. CSUM allows you to be on top of every change, whether it be positive or negative. It is important for Supply Chain Professionals to always have this information available to act on and to make vital decisions effectively.
Hidden Gems of Clinical Supply Utilization Management
1. Validates Your Price Savings – Use your CSUM program to validate that every contract price and standardization change actually happens and that the projected savings result is achieved after the change has been implemented. By knowing up front whether your savings are being achieved, you can take proactive steps to either reel in the savings or go back to your original implementation steps to put the savings initiative back on track. The worst thing for you would be to report that you are going to be saving $670K in contrast media and end up not saving, or worse, losing $340K instead. It is better to validate everything!
2. Reports Contract Price Savings You Didn’t Know About It – Many times, your contract price changes save more than you realize but nobody is updating your savings report to reflect this. In the days when there is an abundance of minor line-item savings of $2K here, $5K there, $15K, etc., it is important that when you do save more that you get credit for the actual savings on your savings report. For instance, one hospital thought they saved $103K on their new CRM device contracts, but they actually saved $155K. They adjusted their numbers because they knew about the change versus the projection.
3. Shows Utilization Savings that You Had No Idea Were Happening – Whenever I present at Value Analysis Team Meetings, I normally start off with savings that the hospital/health system had no idea were happening. For instance, one organization had reduced their costs in PICC line products by 46% in a 12-month period but had no idea this had happened. There were no pricing changes, but this was very real savings and optimization that occurred. They had no idea this was going on without their Clinical Supply Utilization Software highlighting this.
4. Provides a Baseline for Change – Whether you’re looking ahead to future changes or reviewing the past, it’s important to have a baseline that shows exactly where each supply or service category stands, using a patient volume centric measurement system. If you are about to change out your entire wound care dressing contract for an alternate vendor, then you are going to want to have the baseline cost per adjusted patient day on the use of your old dressings and then track them against utilization moving forward. Besides price, you will know with certainty whether you are consuming too many or not enough wound care dressings under this new contract with little or no work.
5. Alerts You to Unexplained Variations – Sometimes there are huge swings in utilization that are due to factors other than contracting and supply chain procurement that could be more problematic if left unchecked. For example, you see a major drop in environmental cleaning products’ utilization when you know that no contract changes have occurred. Could this mean that cleaning is not happening on the same level as before? It is best to use this information in a positive way and simply ask the department head what is going on. Sometimes it is a change of procedures, or it could be staff shortcutting which you can help guard against with utilization tracking.
What is Measured Happens with Clinical Supply Utilization Management
CSUM is the pinnacle of knowing what exactly is happening at any given time frame from a cost and quality standpoint. Not only does this provide strategic evidence of new savings opportunities but it has much more functional use for your Supply Chain Department, which is what you want with any system you dedicate time and resources to implementing and then maintaining over the long term. If you don’t have this type of reporting in place, then you really should be finding a system that will work for you.
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