Are Clinical Supply Utilization Misalignments a Myth or a Reality at Your Hospital, System, or IDN?

In some supply chain and value analysis circles, clinical supply utilization misalignments (or the wasteful and inefficient consumption, misuse, misapplication, or value mismatches in a healthcare organization’s supply streams) are deemed not significant, can wait for another day to be pursued, or not worth the time or effort to track them down. (Spoiler Alert) If you believe that any of these statements are true then you are missing out on a bonanza of supply chain expense savings for your hospital, system, or IDN. If you still doubt that your CSUM are out of control, read on.

What Happens When Your Products, Services, and Technologies are Placed in the Hands of Your Customers?

The ability for us to see, with the naked eye, what happens when the products, services, and technologies we are buying are placed in the hands of our customers is limited, inadequate, and deficient. Therefore, we don’t see the following six behaviors that contribute significantly to our hospital, system, or IDN’s clinical supply utilization misalignments:

1. Usage Patterns Change (in some cases dramatically): It’s not unusual to see a product, service, or technology’s usage pattern jump 300% in one quarter after a change in a commodity or a change in a policy or procedure.
2. Customers Use the Wrong Product for the Wrong Patient Care Function: Utilizing a higher priced infant oxygen sensor when an adult oxygen sensor is functionally and medically appropriate.
3. Policies Change or Customers Stray Away from Established Protocols: Changing every patient’s IV set on every shift vs. every 48 hours as is a hospital’s set policy.
4. Products, Services, or Technologies Have Quality Issues or Failures: Nurses forced to use two point-of-service diabetes test strips, since every other one is defective.
5. Wasteful and Inefficient Bad Habits Form: Changing bed linens Monday, Wednesday, and Friday whether it’s needed or not.
6. Supplier Upselling Their Product Lines to Customers: A product, like a disposable electrode, has a defect so the supplier then sells the hospital new higher priced electrodes to solve the problem, even though the defective electrode is under a GPO contract at a fixed price for one year.

If you think long and hard about it, I’m sure you can add to this list that contributes to your hospital, system, or IDN’s utilization misalignments. Trust us when we tell you that the costs of your utilization misalignments are significant, material, and do make a big dent in your healthcare organization’s bottom line every year – if not eliminated.

Your Hospital Supply Utilization Misalignments Can Also Dramatically Effect the Money You Think You Have Saved Every Year

So you think you just saved 12% (Figure 1) on a commodity that you are purchasing. Think Again!  If your utilization changes (Figure 2) because of a poor in-service of the new product, you could be costing your healthcare organization $29,040 more each year on just this one product.  

Figure 1

Figure 2

Warning! Don’t disregard this scenario out of hand since we see it happening every day in our clinical supply utilization management practice. Hospital, systems, and IDNs think they are saving money, but in reality they need to discount these savings by about as much as 19% annually since their savings are being squandered by their customers’ frequent utilization misalignments.

It’s Time to Become Proactive or Lose the Gains You Have Already Made

Your clinical supply utilization misalignments are like a cancer that is eating away at your annual savings gains. If you don’t nip them in the bud, they will grow exponentially (we have the data to prove it) until they will be noticed by your CFO, COO, and CEO. It’s time to become proactive or lose the gains you have already made. That’s how you decrease the effects of utilization misalignments on your healthcare organization’s bottom line.