July 11

Clinical Supply Utilization: How Do You See the Invisible Savings in Your Healthcare Organization?


On a recent conference call with a Supply Chain Leader and his Chief Financial Officer, we were discussing the hows and whys of big savings with Clinical Supply Utilization Management (CSUM) and triangulating savings with various key performance indicators. Right away the CFO jumped in and said that he could see that this was the perfect way to see the invisible savings that all of us CFOs believe are still there in our supply chains. We just need to find them and work them out. Needless to say, I was speechless as I realized that CFOs do believe there are more dollars in their supply chains and realize that it may not be the contracts or the standardization that will reveal this to their supply chain team to be able to take action on this.

Clinical Supply Utilization Reveals Invisible Savings Opportunities

In a perfect world, every supply chain organization would standardize their vendors to the right level and optimize their supply/purchased services formulary of products within their group purchasing and custom contracts to gain the overall best value and pricing. The reality is that we are dealing with a moving target and continual revolving door of products, services, and technologies as well as new modalities of treatment that create the ongoing challenge of gaining the best value. Not to mention changes in use patterns, policies, staff, availability, and procedures on the existing products, services, and technologies already being consumed in our hospitals. Just the thought of putting your finger on all these products and services and figuring out which ones are going to give major savings is a challenge, let alone actually making the savings happen.

Clinical Supply Utilization Management is an Ongoing Program – Not a One Time Event

The simple solution for organizations in these inflationary times is to establish their baselines for their own Clinical Supply Utilization Management Program to stratify where their invisible savings are hiding and where they are not. Then, direct whatever resource is best to drive out these savings because you have the proof that these are real and will be able to continually follow up on these until the costs are driven out. When we work with healthcare organizations, we are continually bringing new savings opportunities to the table. Some are accepted and acted upon right away, but some are not accepted. Since we have a CSUM baseline reporting system in place, we can keep bringing up these opportunities along with new ones on a continuing basis. Sometimes the timing is not right or other factors are at play but there will be a good time and then the savings opportunity can be addressed.

Many organizations are in a profitability crunch and are looking for all the savings they can get, but we are seeing that there is a lack of belief in what exactly the next step is for big savings for supply and value analysis departments. You don’t want to delve into any area unless you have proof and that includes CSUM. With all the reporting, benchmarks, and key performance indicators, you will have that proof and can make positive sustainable change happen right away.

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