In the hospital supply chain, many are in the mindset that keeping high inventory levels is more important than using up soon-to-expire material. Waste is basically considered unavoidable. But, that’s simply not the case and I want to share some good solid advice on how healthcare supply chain automation will help reduce waste in your hospital.
It’s unbelievable that the U.S. healthcare industry wastes between $760 billion and $935 billion annually, which accounts for 25% of overall healthcare spend. Faced with greater cost pressures and declining revenues, health systems and hospitals can’t afford any level of unnecessary expense. Financial pressures have only escalated with COVID-19 halting elective procedures in 2020. Based on a survey by the American Hospital Association (AHA), the projected losses of U.S. health systems and hospitals in 2020 will be at least $323.1 billion due to the pandemic.
With supply chain being the second largest area of costs for healthcare organizations, it is a natural target area for waste reduction and cost containment. But that leads to the question, “where do I even start?!” Let’s begin with examining three areas where you can identify waste in your supply chain for greater efficiency, lower costs and improved financial outcomes.
How Healthcare Supply Chain Automation Reduces Waste in These 3 Areas:
Labor costs represent 60% of an average hospital’s operating expenses; therefore, increasing productivity and efficiency are keys to financial improvements. Healthcare organizations that still rely on manual processes for supply chain management are throwing money out the door. When a clinician spends his/her time searching for supplies or manually keying product data into multiple systems for clinical, supply chain and financial documentation, he or she is wasting valuable resources on administrative tasks, when these efforts could be applied to patient care. Automating supply chain processes for improved inventory management, supply availability and streamlined documentation eliminates this waste and keeps clinicians focused on patients.
2. Expired or Lost Products
Healthcare organizations that lack visibility into their supply inventory cannot effectively manage product expiry dates, leading to waste, or worse, the use of expired products on patients. Without an effective inventory management system in place, products are also lost within the walls of a facility, particularly when clinicians choose to create their own supply stockpiles in fear of running out. To reduce waste in this area, implement a system that extends healthcare supply chain automation into all areas where inventory is housed, including clinical and procedural areas. The good news is that there are specialized supply chain solutions to help hospitals reduce waste and ensure the right products are available at the right time.
3. Charge Capture
Failure to capture products used in a procedure, particularly high cost supplies used in the operating room (OR), leads to waste through the inability to bill payers for these items and in turn receive reimbursement. When point of use (POU) product capture in the patient’s electronic medical record (EMR) is complex and/or labor-intensive, some clinicians skip this step because it takes their time and focus away from the patient. While the main priority of any health system or hospital is the care of the patient, the reality is that the organization must make money in order to provide care. Furthermore, failure to document supply usage in the patient’s record impedes adverse event reporting and recall management. The key is to make it easy for clinicians to document POU product consumption with a healthcare supply chain automation process that utilizes scanning technology and system integration. Eliminating manual steps also reduces the risk for human error, thereby improving billing process efficiency and accuracy.
It’s Time to Stop Wasting Resources
As an industry, we have a financial, environmental and social obligation to reverse our mindset on waste. There are systems and processes you can implement to not only reduce overall waste, but also reduce the burden on the frontline and back-office staff by improving workflows and optimizing time on patient care. It’s a winning solution for the planet and your organization.