The healthcare supply chain has become an important topic for many hospitals and healthcare facilities as they seek out ways to cut costs while still continuing to deliver quality and speed. Medical care providers list operations and supply chain management as the second-largest hospital cost behind labor, reported HIT Consultant. Automated data collection could allow organizations to make more informed decisions that could help reduce these expenses.
There are several reasons that this is an important consideration for hospital decision-makers, explained HIT Consultant:
- $5 billion is lost annually due to inefficiencies in the implantable device supply chain
- Supply chain-related expenditures account for 40 to 45 percent of a healthcare system's operating costs
- Some healthcare organizations predict that supply costs will overshadow labor costs by 2022
"In order to avoid the many error-prone points along the way, providers must seek to automate and streamline the supply chain process to find savings – which can reach up to 12 percent of supply chain costs," GHX CEO Bruce Johnson said in an interview with HIT Consultant.
There are five ways that healthcare organizations can increase efficiency, cut costs and collect more data to streamline their supply chain and operations.
1) Automated data collection
Data collection is a key step for creating more efficiencies throughout the supply chain. It can help organizations streamline requisitions, purchase orders, invoices, supplies tracking and reduce human errors that lead to equipment or supplies shortages. Over time, automated data collection will be able to predict what supplies are needed so hospitals can be more efficient about orders and requesting supplies, and even managing recalls that may affect products currently in use or being stored in their facility.
2) Using data to make healthcare decisions
When hospitals and healthcare providers amass data over time, they can actually use this information to make healthcare decisions or predict which devices or supplies should be used to treat different conditions. Analysts can then uncover new treatment methods, device risks or other data that could positively impact patient care.
"As provider organizations stride toward new business requirements, they can consider the supply chain as a backbone – a key component of technology infrastructure – that can help capture and share the data they need," explained Johnson. "For example, an organization that's capturing data about all of the medical devices and products used during a patient procedure can then use this data to populate the same information in other locations, such as the electronic health record. In the future, a one-time data capture for a multitude of uses can drive much greater efficiency and compliance."
3) Reducing waste
Data collection efforts will also make the supply chain more efficient as providers and suppliers better understand the amount of products or supplies needed at any given time. This can eliminate or significantly reduce expired or lost supplies, reported FierceHealthcare. A Gartner study found that providers could reduce supply chain costs by up to 15 percent through better inventory control and management. That would mean a 2 to 7 percent profit increase, explained HIT Consultant.
4) Automating facilities across a network
Some healthcare facilities could implement supply chain automation tools not just in one facility but across a network of hospitals, explained the news source. This would allow a network to better understand its entire supply chain, even if facilities that otherwise wouldn't have the budget for these kinds of changes.
5) Standardizing data
Data standardization can also help make this possible, noted Gartner, but only if more providers, manufacturers, distributors and pharmacies work together to create consistent data sharing efforts. This will also improve visibility and collaboration, resulting in future improvements to healthcare supply chain efficiency efforts.
"Healthcare has two choices: dig in or embrace change," concluded Johnson, according to Fierce Healthcare. "With the additional pressures placed upon the industry due to the Affordable Care Act, providers and suppliers must join together this year to accelerate change, or risk falling off the fiscal cliff."