February 21

Clinical Supply Utilization Management Mistakes You Should Avoid

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We are happy to report that more and more supply chain professionals are aware that clinical supply utilization management (SUM) is even more important than obtaining the best price on a commodity because of the long-tail effect of cost overruns due to wasteful and inefficient consumption, misuse, misapplication, and value mismatches. Yet many supply chain professionals are unaware of these three common SUM mistakes that they need to avoid:

Clinical Supply Utilization Mistakes to Avoid

1. Accepting Any Excuse From Users On Their Supply Utilization Misalignments: When you first approach a user about a possible supply utilization misalignment (SUM), too often, their first reaction is to blame the SUM on a high census, new surgeon’s protocols, higher acuity of their patients, etc. However, since the SUM’s “Activity-Based Cost” methodology smooths out these and other anomalies, their SUM is caused by other factors that need to be investigated.

Therefore, until you are satisfied that you have found the cause of the supply utilization misalignment, never give up searching for the reason for the anomaly. For instance, we have been given 100s of excuses for SUMs over the years but until we see with our own eyes what it is causing the SUM, we never give up looking for the root cause. Twenty percent of the time there is a legitimate reason for the SUM, but 80% of the time it is caused by misuse, misapplication, or value mismatches.

2. Thinking That Obtaining A Better Price Will Solve Your Supply Utilization Misalignment: It might seem like a quick fix to obtain a better price on a commodity that has been targeted as a SUM, but it is wishful thinking since the SUM still exists and will not get better (maybe even worse) when it is hidden by a better price. That’s why you need to aim for obtaining the best price and utilization on the commodities you purchase, so you have the best of both worlds.

3. Accepting That A Future Fix Will Correct The Supply Utilization Misalignment: I can’t count how many times a department head or manager will tell us that they realized their costs are out of line with a commodity and have a fix in the works to solve it, like an upgrade to their telecom system. First off, when you hear a customer tell you this, calculate whether their fix will remove the UM and then track that the fix actually happens. Too often, the impending fix is a smoke screen for a supply utilization problem that hasn’t been addressed with their proposed upgrade, new service, or new pricing plan. Remember, trust but verify all claims made to you by your department heads and managers.

Solve Your Clinical Supply Utilization Challenges

What do all of these mistakes have in common? They all involve behavior patterns of your department heads and managers to protect their territory. While it is a natural reaction to do so, it won’t solve your clinical supply utilization challenges until you become more like Sherlock Holmes with your value analysis and utilization studies.


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Tags

clinical supply utilization, cost management, healthcare supply chain, Healthcare Value Analysis, hospital supply chain, Hospital Value Analysis, supply chain, supply utilization, supply utilization management, value analysis


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