Business intelligence is a popular buzzword in the healthcare industry, tapped as a cure-all for almost every faulty business or clinical process. But while BI is not a panacea, done properly it can translate raw data into actionable knowledge and help cut hospital costs.
Chip Bunata, vice president of advisory services at VHA Inc., says BI can enhance the performance of hospital materials management if data is integrated at key points that link various supply chain functions. Bunata spoke to attendees at the The Association for Healthcare Resource & Materials Management (AHRMM) 2014 annual conference Monday.
The four essential supply chain functions Bunata identified as potential action points around BI are: supply data management; procurement; value analysis; and sourcing and contracting. Below are six ways supply chain managers can integrate business intelligence across these functions to reduce expense costs and boost value.
- Combine data management and price performance. Bunata said supply chain leaders can use BI to benchmark a larger percentage of their annual spend, and discover more opportunities for savings. "You can find out where cash flow is hiding within your supply data," he said.
- Let deep product data accelerate value analysis. Hospitals can use enriched, attributed product data to speed up their value analysis results. Through the use of a formulary, supply chain directors can make it known to their value analysis teams which products are preferred.
- Maximize savings by combining data management and sourcing. "Price movements in the market are invisible without data," Bunata said.
- Pricing insights amplify your value analysis results. Bunata said hospitals should help their value analysis teams understand the financial impact of different product decisions by using BI from their procurement process. This data supports "what if" scenarios in evaluating conversion opportunities, he said.
- Put insight into action by mapping a path to value and executing. After opportunities for cost reduction have been identified, hospitals should leverage a scalable solution to deliver results. "You'll want to know exactly where to begin and where to end negotiations," he said.
- Know your target product mix, key variables for evaluation and execute. After hospitals have considered the financial and non-financial impact of product purchases, they can execute on their local sourcing initiatives. "Leverage deep category expertise to supplement your internal knowledge," he suggested.