Reducing Health Care Supply Chain Management Costs with Mobile Data Collection Software

Meagan Douglas
Wed, Mar 1, 2017
Health care providers who use advanced data collection tools can see operating room costs drop.
Health care providers who use advanced data collection tools can see operating room costs drop.

It's not cheap to run an operating room, and the high cost can depend on a number of factors. These can include the type of equipment used, the surgery performed and the location the surgery takes place at, noted Alex Macario, professor of anesthesia and (by courtesy) of Health Research & Policy Program director Department of Anesthesia at the Stanford University School of Medicine, in his report, "What does one minute of operating time cost?"

Costs may also include pre-operating procedures, such as X-rays, certain fixed or variable service fees and the person's health situation, noted America's Debt Help Organization.

The American Health Association stated that operating rooms are not only first in terms of the amount of supplies used, but they're also No. 1 in produced waste. 

John Abenstein, associate professor of anesthesiology at the Mayo Clinic, said that it's critical hospitals try to become more sustainable. He said this practice can reduce costs by decreasing waste production and better allocating resources. In turn, patient care should improve.

Just how expensive is it to perform work on a patient in an operating room, and what can hospitals do to lower costs? Let's take a look. 

Study Finds it Can Cost Thousands to Run an Operating Room
A study published in the Journal of the American Medical Association found that it's expensive for surgeons to run an operating room - $1,398 per case (out of 11,802 cases) to be exact.

Researchers sought to better understand how much money providers would save if they gave surgeons scorecards made from Electronic Health Records to keep track of their surgical supply costs. What they found was when providers hand surgeons the necessary resources to track medical equipment expenses - in this case, scorecards - supply costs drop by 6.5 percent from $1,398 in 2014 to $1,307 in 2015.

The study also noted that when surgeons didn't use these cards (the control group), health care supply chain costs jumped by 7.4 percent between the same years. After researchers accounted for patient demographics and clinical, surgeon and department indicators, total supply costs decreased by nearly 10 percent in the intervention group over the course of one year.

According to this research, health providers who take the necessary steps to improve their supply chains could see significant reductions in their supply chain management costs. In this case, it saved those in the intervention group $836,147.

Health Care Decision-Makers Want to Improve Supply Chains
Based on the high costs we've discussed, it may appear that health care professionals aren't trying to curb spending. However, this is anything but the case.

A study commissioned by Cardinal Health and conducted by health care provider SERMO Intelligence of 150 hospital decision-makers, found that 85 percent of these leaders are working to improve their supply chain to reduce spending and eliminate supply chain waste. 

Tony Vahedian, senior vice president and general manager, Medical Services and Solutions at Cardinal Health, believes that advanced technology can help improve health care supply chains. 

"Data and analytics can transform the healthcare supply chain into a strategic business asset, but solutions need to connect technology to everyday processes and make data visible," said Vahedian, according to a Cardinal Health press release. "These solutions exist today, but they are not being adopted at a large scale in health care. Consider the data providers currently can't access and the insights that could be gained with this information in a shared platform for the entire supply chain to access."

The research indicated that Vahedian is likely correct. A major sticking point to creating smoother-running supply chains is the lack of an eagle's-eye view of the entire chain from the manufacturer to the patient. Another problem is that many providers simply don't know technology exists that can provide them with greater insights into their business's operations. A mere 15 percent of survey respondents said they have a full view of their entire supply chain. 

How You Can Reduce Supply Chain Management Costs
Scorecards are one way to reduce costs, and providers can offer surgeons this type of resource by collecting a substantial amount of data with mobile data collection tools that can integrate into their in-house supply chain logistics management software. They could even award providers incentives (much like the study published in JAMA did) to encourage them to use these cards.

With this solution, providers can track equipment usage and costs, and exchange information in real time through seamless assimilation with mobile solutions, such as RFgen's mobile data collection software. By using these automated data collection tools, providers can realize significant productivity gains, reduce costs and increase efficiency.

While there are multiple steps providers need to take to implement this software, the first thing they must do is get C-Suite executives on board with the idea. We wanted to bring this to your attention because SERMO Intelligence's study revealed that C-Suite executives may not completely agree with how improving the supply chain can cut costs. This article is a great reference point you can use to further your research and develop a report for top executives that describes how adopting data collection can significantly cut expenses. 

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