Some might say that reducing costs does not equal better quality nor does better quality equal improved bottom line costs, but there is a balance that you need to strike that allows for both. In today’s world, it is more about finding and sustaining that optimal balance with the costs and quality of your products, services, and technologies on an ongoing basis. The best way to strike this balance is to lay down a baseline on your cost and quality measures by having an active Hospital Supply Chain Benchmarking Program.
What is Measured Happens!
Setting yourself up for success with benchmarking is simple and begins with establishing a strong baseline. Start with baseline data, then consistently track and measure your supply and purchased services areas over time. First, marry up your cost categories to patient volume centric metrics. Then, find like-sized hospitals and health systems to measure against. You can also measure against your own history which provides valuable insights. However, cohort benchmarking with peer organizations is key as you want to know where you stand against like-sized hospitals and health systems handling similar patient populations and those that are procedurally similar. Now you are measuring!
How Can a Benchmarking System Primarily Used for Cost Reduction Be a Quality Indicator?
This is one of the most asked questions by our clients’ clinicians, which is a very valid question when you are the one having to make the changes to how you take care of your patients with the products and services being analyzed. You might be surprised at how effective benchmarking can be in uncovering potential quality issues — especially when examining utilization/consumption patterns. For example, if your facility is using 43% more IV sets than peer hospitals or even other sites within your own health system, it’s a strong indicator that the issue may lie with quality, waste, or inefficiency rather than pricing. Sometimes, as in the example with IV sets, it’s as simple as the fact that your hospital has gotten away from using IV set labels which is nursing procedures 101. These labels tell you when a set was placed on the patient to which its function is to let you know that 72-96 hours later you need to change out the tubing. But if you are not placing those labels, how are your subsequent nurse shifts going to know when an IV was placed? Thus, the nurses may change out the tubing too often. Or worse, go longer than 72-96 hours.
In the case of IV sets, you could be jeopardizing patient care by changing out a closed system like IV set tubing too often. So, using more IV sets does not equate to better quality. In fact, it may be hurting quality of care, and you don’t even realize it’s happening. This is where cohort benchmarking comes into play to alert you to where you need to address both costs and quality.
Make Optimization Decisions Easier
It can be challenging to know whether to make a change or not in the name of cost optimization, especially when it could possibly circle back and hurt patient care and outcomes. By knowing exactly where you stand with your baseline data and cohort benchmarks, you can know with certainty if you can first achieve your goals and also have proof for your clinicians that the change is going to be viable moving forward. This is a new level of evidence that your clinicians will grow to enjoy, as they too want to know where they stand with their product choices, utilization, and care levels.
The Bottom Line
There is always a perceived cost of making a supply chain change in the name of cost reduction but with your baseline data and cohort benchmarks, you can make those changes in areas that matter. You will have proof that other organizations can operate at lower levels and not jeopardize quality or patient outcomes. This will enable you to wring the towel dry on your products’ life cycle usage, giving you more optimized supply chain categories as well as a benchmarking system you can count on in the short and long term to optimize costs and quality! Get your baseline benchmark data started today.
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