Most healthcare organizations that deploy a system-wide clinical supply utilization management program want to know where they stand on the overall costs of their product, service, and technology purchase categories. Namely, are they doing good, bad, okay, or at best practice levels? Knowing this in every single category that you purchase would be a huge advantage in terms of time, labor, and effectiveness of your supply chain and other non-salary areas of your organization including quality. Yet, most organizations just don’t know and assume that they are doing okay if they have the best price, but there is more to the total cost game than just price. Believe it or not, price is not always the best measure when you are looking at your total cost of use and can deceive you into thinking that your work is done.
Clinical Supply Utilization Management Includes Knowing Where You Stand
The only way to truly find this out is to look at the total cost of the category as compared to its optimal patient volume centric metric. This would be straight forward patient volume metrics like cath lab procedures, adjusted patient days, patient days, lab tests, etc. It sounds simple yet many organizations do not measure in this manner, nor do they seek out comparable organizations to measure themselves against. No measures equal no knowledge and no baseline to compare to other organizations or even your own system and histories. Without this, you are at a bit of a disadvantage compared to other organizations that are tapping into these metrics.
Let’s start with the good news: Best Practices. Over the years of working with health systems big and small throughout the country, you tend to see that most have a fair number of best practice categories that they just don’t know they are at best practice levels on. Most have up to 35% to 50% at or below cohort best practice levels without any measurement in place. You may have a feeling you are good in some areas, but do you really want to operate on gut feel in this highly analytic environment we do business in today? You can only take advantage of best practices when you know they are best practices, otherwise you could be spinning your wheels trying to squeak out minimal savings with lots of time and human resources. In the end, that is a zero-sum gain which will not be worth the effort.
Simple strategic thinking says it is better to know where you are at best practice levels and where you are not and focus on the areas that have the highest variance. This means areas that have the highest chances of netting major savings to aid your bottom line and most importantly you won’t be wasting time or effort with your value analysis teams and clinicians dialing down to your best practice levels. It just makes sense to know exactly where you stand as compared to cohorts in the marketplace (we can help you establish your baseline).
Setting Up Your Clinical Supply Utilization Management Program
Knowledge is power and this new knowledge gained by setting up your baseline clinical supply utilization management program and deploying it system-wide will give you the next level of savings and quality performance that you are looking for. Plus, we have found that this does not affect your strategic sourcing program but really entails further optimizing your products within those contracts. The juice is definitely worth the squeeze and the savings are at the low hanging fruit level which you should take advantage of.
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