Supply chain analytics can be quite the equation to solve for hospitals. Big data is king in the healthcare industry but if the proper measurements are not being taken, the equation can be foiled.
Karen Conway, director for industry relations at Global Healthcare Exchange (GHX), a heathcare supply chain management company, talked to Healthcare Finance News to offer five measurements the healthcare industry needs to pay attention to while tracking supply chain analytics.
1. Percentage of electronic data capture
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If data is not captured electronically and standardized throughout the organization, then the hospital is not capturing data to the level necessary to garner key insights for better decision making, saai Conway. “This includes not only understanding what products are being purchased in what quantity from which suppliers for better contracting, but also to understand the implications for value-based care,” she added. “For example, data can be shared with physicians, which helps them correlate product selection with quality and cost of care and reduce variations in practice.”
Hospitals are seeing a big cash crunch as reimbursement declines and free care increases, so cash sitting on shelves posing as inventory must come under scrutiny. “Without properly tracking inventory across the hospital, risk increases that supplies will expire and become waste,” said Conway. According to Conway, industry analysts estimate wasted products cost the global healthcare industry more than $51 million each year, mostly on the provider side. “There's a great opportunity for savings if inventory can be managed properly,” Conway said.
3. Cost per procedure
Hospitals have a difficult time determining total costs of procedures without good data capture, particularly in cost per procedure. “This becomes especially important when considering implantable devices, which can make up well over 50 percent of procedural costs in the operating room,” Conway said. “Automating processes enables better visibility into products used, and integration between clinical, financial and supply chain systems can improve understanding of total costs and usage, which can also improve demand planning and inventory costs.”
4. Metrics for high-dollar products
According to Conway, many providers are maintaining their global metrics for supply costs but must put more focus on creating more granular metrics for high-cost supplies, for example, tracking supply cost per case by physician for specific surgical procedures or pharmacy costs per diagnosis-related groups.
5. Percentage of products with standard identifiers
Hospitals can benefit greatly from using industry standard product identifiers, Conway said. “Use of industry standard product identifiers, such as those that will be required under unique device identification (UDI) regulation, can provide greater accuracy and visibility about the products used in healthcare,” she said. “This can yield a myriad of benefits, from better usage tracking and recall management, to comparative effectiveness research to supply chain efficiencies and spend analysis.” According to Conway, the value of these identifiers can only be realized if hospitals and healthcare systems use the identifiers for clinical, supply chain and financial operations.