As your hospital or health system grapples with the demands of a healthcare environment undergoing seismic change, it’s time to take a fresh look at how your supply chain fits into the mix. While you’re at it, familiarize yourself with the paradigm of the not-too-distant future: the patient-centered supply chain.
Chain your supplies to outcomes
For years now, providers have employed a range of strategies to harness their supply chain’s capacity and make it a catalyst for efficiency and cost savings. While these efforts have generated results, a major limitation of current supply chains is that they are not tied to outcomes. Most hospitals and health systems still lack a key ingredient that could turn their supply chain operations into powerful tools for better care—the ability to easily connect supply chain systems with clinical and billing applications.
What a patient-centered supply chain looks like
A patient-centered supply chain is one that joins supply chain systems with electronic medical records to support focused pursuit of the Triple Aim and the organization’s specific objectives around quality, safety, and cost.
At its core, the patient-centered supply chain involves the fundamental redesign of how supplies are selected, moved, and delivered to the patient care setting.
Your organization wins
Your hospital or health system realizes many advantages with a patient-centered supply chain:
- Automated orders slash both hoarding and waste;
- Organizations gain greater visibility into supplies and can more effectively manage and distribute inventory because orders are automated and tracked in real-time.
In a business sense, it’s like connecting your front office to your back office. Wal-Mart knows what people are buying in the stores and can filter that all the way back to its distribution centers in China. We don’t have that yet in healthcare.
With a patient-centered supply chain, everything the caregiver needs is there when he or she arrives in the room to take care of the patient. Busy nurses and patient care technicians tend to hoard items to reduce time-wasting trips to the supply room 200 or 400 feet away. Supply hoarding translates into significant material waste, because supplies that are left in patient rooms but not used—or that nurses “stash” and forget—result in wasted dollars when those supplies are thrown away.
More time at the bedside
The operational reconfiguration of the patient-centered supply chain helps to:
- Reduce supply room visits;
- Deploy supply technicians, rather than nurses, to handle supply deliveries;
- Save time by putting the right supplies where they’re needed, when they’re needed
- Reduce the delay to patient care;
- Put caregivers where they want to be and are needed the most—caring for patients.
Centralized storage optimizes efficiency
Companies such as Wal-Mart, Amazon, and Dell rely on large service centers or warehouses for inventory storage. The current healthcare environment of mergers, acquisitions, and affiliations is producing the mass health systems need to justify the creation of similar service centers. These large, centralized distribution points bring additional efficiencies and cost benefits, and can be used to house pharmacy inventory, linens, copy centers, and supplies.
A recent study by the Massachusetts Institute of Technology concluded that offsite warehouses where inventory is pooled can yield significant savings for hospitals and health systems. Savings would be achieved as a result of a dramatic reduction in inventory holding costs, and also a dramatic reduction in on-hand inventory, with one stocking location instead of multiple spots throughout the hospital. Benefits could be further enhanced if several hospitals pool their inventories in a single location.
Stronger analytics support continuous improvement
The patient-centered supply chain pulls clinical, supply, and financial functions together with built-in analytics that can also be used to identify the best supplies with the most positive impact on care.
The result is the ability to:
- Better understand the costs of care and the variability of costs;
- Predict expenditures more accurately;
- Negotiate more favorable contracts;
- Standardize down to a core set of products;
- Reduce unnecessary variation;
- Improve the quality of patient care and reduce costs.
In a patient-centered supply chain, the hospital’s clinical staff pre-determines the items needed for procedures and kicks the order out to the consolidated service center, where those supplies are proactively picked, packed, and delivered so the nurse can spend more time at the bedside focusing on direct patient care.
Connecting the supply chain with clinical care helps to codify and ensure the use of best practices and evidence-based medicine. These same strategies can be applied across the continuum of care.
In addition to the many advantages your organization realizes from a patient-centered supply chain, patients, and especially their health outcomes, benefit as well, with:
- Reduced avoidable readmissions;
- Decreased hospital-acquired infections and other adverse events;
- Increased compliance with the core measures of the Centers for Medicare and Medicaid Services.
Implementing a patient-centered supply chain creates a connection that offers the best strategy for delivering the value and cost-efficiency that consumers, governments, and payers demand. The opportunities for continuous quality improvement made possible by these changes will only expand as payers, patients, and the provisions of the Affordable Care Act begin holding providers to tighter standards, while patient volume continues to climb.
Mark Weber is chief business information officer at Infor.