Health systems today are already stretched thin, and the last thing leaders and staff need is another program to build. But the reality is that the savings potential from Clinical Supply Utilization Management (CSUM) is too significant to ignore, especially as traditional contracting and price-based strategies are delivering diminishing returns. This isn’t about abandoning your existing efforts in contracting, standardization, or procurement; those remain essential. However, if you’re only focused on price, you’re leaving substantial, untapped savings on the table. CSUM opens the door to a deeper level of optimization, one that goes beyond price to capture real, sustainable value.
The Juice is Worth the Squeeze with an Additional 5% to 10% in Supply Budget Savings
The opportunity with Clinical Supply Utilization Management (CSUM) is substantial, typically representing an additional 5% to 10% of total supply budget savings. Yet most supply chain and financial leaders are unaware of this potential, largely because there has been no coordinated, system-wide effort to target utilization-driven savings. As a result, significant value remains hidden within existing spend, beyond what traditional price-based strategies can uncover. Organizations that recognize this gap quickly understand the urgency and know that capturing even a fraction of this opportunity can translate into immediate and meaningful financial impact.
At the same time, Value Analysis teams are already operating at capacity, focused on contract conversions, product standardization, recalls, and new product evaluations. These critical priorities leave little bandwidth to pursue utilization-based optimization in a structured way. The solution is not to overload existing teams, but to create a dedicated CSUM function with a clear mandate to focus exclusively on waste, overuse, inefficiencies, and value mismatches. With the right structure and focus, this team can drive targeted, repeatable savings — setting the stage for the roadmap steps that follow.
1. Charter Your New CSUM Team/Program Under Your Existing VA Steering Committee – There is no reason that you cannot use your existing VA Steering Committee (I hope you have one!) as the reporting and decisions support channel for your new CSUM You are going to need senior leadership support for this program because we are going to be asking key departments and hospital staff to make changes in the name of cost efficiencies and eliminations in waste. This is tough as those department heads and managers are all for saving money until it gets to their departments. It is critical that you have the support that VA has and it just makes sense to use your already existing VA Steering Committee for this purpose.
2. Form a True CSUM Team – Keep in mind that this is a team, not a committee where one, two, or three people do all the leg work. This is a team where members will actively be involved in the projects that the team is working on. For example, if you are working on IV set utilization, it would be all hands on deck because IV sets touch everywhere in the health system so all team members would play a role.
3. Provide CSUM Training – If you think you are going to put a team together in an advanced cost optimization strategy and methodology and tell them to “go save money,” that is not going to work, as they won’t know what to do. When team members have no training, they are just going to call on what they know which is back to finding the best price. To avoid a brand-new team full of junior contract administrators, you are going to need proper training on how to find savings beyond price. Assuming they know CSUM is a recipe for quick failure.
4. Fuel the Savings Machine – You are not just going to pull viable CSUM savings opportunities out of a hat, so you are going to need to fuel your CSUM Team with savings opportunities. Not just savings opportunities but opportunities that will bear fruit in the name of major savings that they cannot fail on. Normally, health systems will try to give a pass on major contracts to see if they can be cost optimized before the contracting team engages in negotiations for the next contract. This is a normal trigger that you can use for your CSUM Team as a project, but they are not sure thing, and you may already be optimized in contract areas. I highly suggest that you consider employing a Clinical Supply Utilization Software Reporting System that will allow you to benchmark and track your utilization over the short and long term, providing you with proven savings projects for your CSUM Team.
5. Use Strategic Value Analysis as Your Project Method for Cost Optimization – There is nothing better than the Value Analysis Functional Approach to use as the methodology as you work through every CSUM project. You can use the functional approach to identify waste, inefficiencies, feature-rich products, and life cycle shortfalls, then match them to lower cost alternative products or eliminate the waste altogether.
6. Educate Your Department Heads, Managers, and Other Stakeholders in CSUM – You don’t want to form a new CSUM program and team(s) just for them to fall flat because your department heads and managers are putting up roadblocks to this new program. Most of the time, they put up a fight because they don’t understand exactly what is happening and they want to protect their department’s clinical balance from being disrupted. The best way to avoid this is to train your department heads and managers in CSUM so they can be vital subject matter experts and allies instead of roadblocks.
The formula for taking the next steps into Clinical Supply Utilization Management might sound simple, but it is going to take time for your organization to start to gain momentum. Once you do, the savings will be next level. Plus, because CSUM has been virtually untouched forever, it will be a few years before you can totally start to clear the deck of savings beyond price. The key to your success is to decide to create a CSUM program today to save big tomorrow!
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