December 7

Hospital Supply Utilization Management Myths


There are many myths, half-truths, and misinformation floating around the healthcare marketplace about supply utilization management (SUM). This misinformation is holding back hospitals, systems, and IDNs from embracing this new supply chain discipline. To help dispel some of these untruths, here our five myths about supply utilization management that you need to know about:

Hospital Supply Utilization Management Myths

1. My Value Analysis Teams Are Attacking Our Utilization Misalignments(1): Healthcare organizations often claim that their value analysis teams are attacking their wasteful and inefficient practices. When in fact, this couldn’t be further from the truth. Most value analysis teams are still focused on price and standardization opportunities, thus ignoring the big elephant in the room…supply utilization management.

2. My GPOs Are Monitoring and Reporting Our Utilization Misalignments: It’s been our observation that GPOs aren’t organized, structured, or equipped to monitor or report on your supply utilization misalignments, because your GPOs, too, are only focused on price and standardization opportunities.

3. My Spend Manager Software is Picking Up Many of Our Utilization Misalignments: While spend managers are good tools to identify maverick spending, eliminate fraud, identify high dollar expenditures, etc., they don’t uncover your supply utilization misalignments, since they aren’t programmed to do so. Only clinically volume centric Hospital Supply Utilization Management Software is designed to perform this unique function.

4. My Staff and I Don’t Believe We Have Utilization Misalignment Issues: This is like saying I don’t have a moral problem in my department because no one is complaining. You can’t see, feel, or guess where your utilization misalignments are hidden. Therefore, you need a SUM system to identify, eliminate, and then manage your supply utilization misalignment issues going forward.

5. My Staff and I Have Tried Looking into Our Utilization Misalignments with Little Success: To repeat, you can’t see, feel, or guess where your utilization misalignments are hidden in your supply streams. To find them, you need a SUM system to identify, eliminate, and then continually manage your utilization misalignments going forward. There is always a before, during, and after review on every single category, product, or service.

The New Supply Chain Discipline

It is easy to believe the above myths about your healthcare organization’s supply utilization misalignments since it is a convenient way to ignore supply utilization management as a new supply chain discipline. A much better way is to accept that your utilization misalignments are real, cumulative, and damaging your healthcare organization’s bottom line. Now that you know the facts, it’s time to invest in a SUM system that will rein in these run-away, unnecessary, and unwanted costs.

1Definition of Supply Utilization Misalignment: The wasteful and inefficient consumption, misuse, misapplication, and value mismatches in a healthcare organization’s supply streams.

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