“Ignorance is bliss,” as the saying goes, but in the healthcare supply chain, not knowing never helps the bottom line. When something ambiguous comes up in a vendor contract, the running joke is that the ambiguity always favors the vendor, not the health system. That’s why you need to know every “grey area” that can hurt your bottom line, so you have something in place to deal with it. AI certainly helps with the contracting and pricing front. It helps much less in the patient-volume-driven areas: utilization, consumption, waste, inefficient use, and shortfalls in life-cycle value. For those, you need better data and better systems.
The best Supply Chain and Value Analysis professionals I work with always seem to know where they stand on just about every topic, including clinical supply utilization management and purchased services management. These are the new “grey areas” in the healthcare supply chain’s cost continuum, and they need to be tackled. Thanks to GPO and custom contracting, most organizations know where they stand on pricing across their categories, but today that’s only one piece of the puzzle. The biggest challenge is managing in-use costs. In most cases, that’s the ongoing “grey area” that’s costing you money without you even knowing it.
Track and Benchmark Everything Continually
In most cases, it isn’t the clinicians’ job to track their nursing unit’s product use or how many Surgical Energy Instruments a surgeon goes through per case. But someone has to track all of it. Thousands of products are used every day, so you need a system that shows you where over-consumption and waste are hiding. Not knowing only hurts your bottom line and drains cash from your budget, and that problem always lands back on Supply Chain anyway. You might as well start tracking utilization and consumption now rather than get caught up later.
The only way to know where you stand in every category is to track utilization and benchmark it against patient-volume-based metrics such as cost per patient day, cost per cath lab case, and cost per lab test. You need to know where you stand in every area of your supply chain, major and minor. Only then can you be confident you’ve covered everything and left no “grey areas” untouched.
Stay Ahead Instead of Falling Behind
When you uncover a major savings opportunity, whether through contracting or by stumbling across it, chances are the problem has been going on for a long time and has been hurting your bottom line the whole while. If you track utilization and benchmark it continually, you can catch cost increases sooner and limit their impact. A small increase caught early is also far easier to fix than a million-dollar problem that’s had years to grow.
The Time Is Now
Most organizations already have what they need to start their own Clinical Supply Utilization Management (CSUM) and benchmarking program. They just don’t know where to begin. You have capable Value Analysis and Supply Chain analysts, but they need a proven system to run the utilization and benchmarking process. The next level of major savings is within reach. To get there, you need the right reporting and savings tools in place, ones that show you where your opportunities are hiding today, tomorrow, and going forward. Go get your savings now!
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