The pandemic of 2020 has been a financial shock to any and all healthcare organizations. So much so, that The American Hospital Association estimates $120.5 billion in financial losses from July 2020 to year-end, on top of $202 billion between March and June of this year. These financial numbers were unavoidable, inevitable, and predictable, but they are not sustainable!
This new paradigm requires supply chain professionals, as a survival strategy, to start to think differently and do differently related to how their customers utilize, conserve, and extend the life of their medical devices. This is one universal way to put the brakes on these losses by eliminating the wasteful and inefficient consumption of the products, services, and technologies in your supply streams. We estimate that this waste and inefficiency in supply streams represents 7% to 15% of a healthcare organization’s total supply expense budget. We see the best strategies to rein in these unnecessary and unwanted costs are to:
1. Reduce the consumption of the products, services, and technologies you are buying by measuring, monitoring, and controlling their usage with clinical utilization management. For instance, a survey of waste from 58 neurological procedures found that on average, 13% of surgical supplies went unused. The survey concluded that $653 per case in supplies went unused, or $2.9 million annually.
2. Reuse of bed pans, urinals, isolation gowns, surgical towels, and drapes, etc., vs. disposables should be revisited since the amount of waste produced by these products is obscene and costly. As a bonus, this reuse can also enable healthcare organizations to be self-sufficient during emergencies like pandemics, hurricanes, tornadoes, or earthquakes.
3. Recycle medical devices (oximeters, orthopedic and DaVinci disposables, surgical suction, etc.). SVAH’s studies have shown that medical devices are not being reprocessed effectively by as much as 40% because of poor controls. Hospitals aren’t recycling enough of their medical devices to make a dent in their cost of goods purchased. In particular, we find that healthcare organizations are believing the reports from their recyclers that they are meeting or exceeding best practices of their peers. Nothing could be further from the truth! This is because all recyclers don’t have their customer’s purchasing history or inventory data to make these claims.
I’m sure you would agree that we have become, over the last few decades, a disposable healthcare culture, mostly based on convenience. Now that we have an opportunity to make changes due to the effects of the pandemic, I would recommend that it’s time to create a “reduce, reuse, and recycle” culture to strengthen your healthcare organization’s financials. This is because there are multiple benefits (lower cost, a lesser environmental footprint, and self-sufficiency) for doing so.
P.S. If you would be interested in a demo of our ReProcessTracker™ that can save you 31% to 48% or more on your recycling because of more precise (and unbiased) control, all-inclusive data, and reporting, just e-mail me at bobpres@SVAHSolutions.com to schedule your demo. We guarantee it with a 3:1 return-on-investment.
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