I’m sure you have discovered, after much frustration, that you can’t manage and control everything your healthcare organization is buying for its clinicians. It takes time, buy-in, and leverage to make any meaningful change in clinical practices. On the other hand, have you ever thought of having clinicians compete to reduce their own supply utilization expenses? It could be a game changer for your hospital, system, or IDN if you do so.
Intuitive Supply Expense Data Is the Answer
Right now at most healthcare organizations, clinicians are receiving in-depth data on their labor costs to manage this cost driver effectively, but they are receiving little or nothing on their supply utilization expenses, except their budget variance reports. If you have ever seen your hospital’s supply budget variance reports, you know they only tell part of the story. A clinician could be within their budget parameters, but still be spending way too much on their supplies. This can all change for the better if you provide timely and intuitive supply expense trending and benchmarking reports on a quarterly basis, that are actionable, to each and every clinical department head and manager in your facility.
Empower Clinicians with Supply Utilization Reports
As you know, very few clinical supplies or technologies are changed without the agreement of clinicians. The reason for this is that any clinical change must be owned by these same individuals for the change to stick. What clinical department utilization reports do is give the control of supply costs back to clinicians, with the result that they are more accommodating to changing their products, services, or technologies, if warranted, because it was their own decision to do so.
Competition Creates an Environment for Rapid Change
In addition to clinical departments changing their costly supply expense practices once they see their department’s supply utilization reports, you can jump-start this process by having your clinical department, especially nursing floors, compete to have the lowest expense per patient day. The financial effect of this competition between departments is impressive. For instance, we are seeing nursing departments drop their unit’s cost by as much as 11% to 23% without supply chain management holding these individuals’ hands to do so.
Supply Chain Management Can’t Carry All of the Workload
Supply chain and value analysis managers have been doing a good job on price and standardization savings, but too often they are hitting the wall on removing waste and inefficiencies from their clinical departments’ supply streams. This is because clinicians push back with a vengeance if they are challenged in any way. Yet, it has been our experience that when clinicians can see supply utilization data for themselves that shows specific product or technology costs beyond acceptable limits, they take corrective action 97% of the time. Yes, it does take a little longer for the other 3%.