Price is a very simple element of the healthcare supply chain procurement process. You order the product at that price and get the total spend for that line-item product. This is the total spend that we see every day from the vendors and manufacturers that we purchase from. Now envision this same scenario happening to thousands or even tens of thousands of products on an ongoing basis at your health system. Standard operating procedure, right? That is a lot of prices to look after and, yes, a heck of a lot of spend to track after as well. There is a synergy to these that add up to the total spend cost at your organization. No surprises here, yet. None of this is surprising anyone in the healthcare supply chain world, but the true “total cost” really involves keeping the organization’s quantity used to the lowest possible level while maintaining the best price. There are many ways that price can get out of line, but we also need to track utilization cost, which goes beyond total cost and uses a patient volume centric metric to measure it. So, tracking Cost Per Adjusted Patient Day to the Supply Category Cost or Cost Per Cath Lab Case Per the Cath Lab Category is a quality measuring tool. So, why aren’t we employing this further?
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