Summit Pacific Medical Center (SPMC) materials management department needed to
shift from a manual procurement-focused ticket system to an inventory-based,
data-driven, end-to-end supply chain model to provide enhanced support and
value to SPMC clinical areas.
end of 2017, the SPMC materials management team had succeeded in expanding and
improving inventory throughout the hospital and was pushing the boundaries of
integrating new areas into the materials management system. Through 5S,
Standard Work and Continuous Improvement methods, the materials management team
created a highly efficient, data-driven replenishment system that enabled Par
Optimization Analysis and slotting logic to proactively size and adjust
locations based on consumption to deliver a high reliability of inventory at a
low cost of effort. Through point-of-use integration, clinical staff was
spending less time managing supplies and had more of what was needed to treat
patients. By reducing and sizing inventory locations to demand, supply chain
staff was able to reduce their workload and convert former areas that were
needed for inventory to patient care areas. To add visibility and transparency
to the process, they developed a robust set of dashboards that accurately
reported their progress toward goals and areas for improvement and provided
important information and feedback to end users on their supply expenses.
improved process resulted in an increase in materials management controls and
supply maintenance tracking from 2,727 physical inventory tracked locations to
more than 4,364 locations. There was also a net 30% reduction in inventory
levels and total hospital inventory turn rate of 4.6. Data visibility was added
to department purchases, as well as enhanced controls. Clinical staff time
spent on materials management was significantly reduced.
About Summit Pacific Medical
Pacific Medical Center (SPMC) is a critical access hospital with a Level IV
Trauma designation. SPMC offers 24-hour emergency services including a
full-service laboratory and diagnostic imaging department. The Emergency
Department is staffed 24 hours, 7 days a week by an ED physician. SPMC also
operates three rural healthcare clinics and an urgent care clinic that is open
seven days a week. The hospital is unique due to its size and accessibility.
SPMC is proud of its low emergency department wait times and its ability to
give patients access to a doctor quickly.
a Point of Use (POU) inventory management system in the Parkview Health medical
surgical areas resulted in scanning compliance of approximately 70%. According
to POU vendors, 70% is considered a benchmark, however, with $25 million of
chargeable supplies passing through the POU system on an annual basis, settling
for the industry standard of 70% compliance would mean leaving $7.5 million in
potential charges on the table.
support of senior leadership, Parkview Health developed a project team whose
goal was to enhance the POU system to ultimately reach 90% compliance. The team
collaborated with subject matter experts from supply chain, information
services, revenue integrity and finance. The team identified multiple changes
that could be implemented including building a custom database table, creating
daily scanning reports detailing missed scans and charges, and building a
dashboard so senior leadership could monitor performance monthly.
Health reached its compliance goal of 90% and exceeded $22 million in overall
patient charges; $5.5 million of which would not have been possible without the
efforts of this project. Process improvements included the development of a
custom field in the software’s movement table to track recovered charges, as
well as the creation of two daily automated reports to provide to nurse leaders
(one to capture supplies that left the room without being scanned and the
second to capture chargeable supplies that were scanned as general supplies
instead of being attributed to a patient). In addition, a dashboard was built
that would indicate compliance and charge capture by hospital for senior
leaders to monitor and report on during their monthly organizational huddle
About Parkview Health
Health is northeast Indiana’s largest healthcare provider, consisting of eight
hospitals and a physicians group with more than 500 providers. With more than
10,000 employees serving a population of 820,000, the not-for-profit health
system’s mission is to improve the health and well-being of the communities it
Wooster Ambulatory Surgery Center (WASC) was facing many inventory issues: inventory costs out of proportion, inefficient management of the supplies needed and how they are purchased and/or stored and too many miscellaneous items on stock shelves.
WASC became a sole-source member of Intalere and began utilizing Intalere supplier contracts to receive the best possible pricing on all supplies needed. The facility also determined that increasing the number of custom packs used daily would allow the distributor of the packs to buy them in bulk, providing a better price per item.
In addition, WASC implemented a “two bin” stocking and storage system which helps the purchase agent keep a better eye on stock and know when items need to be ordered. Using the two bin system eliminated the storage of items in multiple locations and improved the efficiency of inventory management. Since WASC is a small facility and space is limited, using carts for each service allowed staff to stock specific items in one place and helps the purchase agent and staff know what is available at any given time.
By using Intalere contracts for purchasing supplies, WASC’s supply costs have been significantly reduced. Implementing the two bin system has allowed for more efficient inventory management and restocking, and allows nursing staff the ability to focus on patient care. The system has helped WASC decrease inventory by roughly 1/3 of their previous inventory. The new system has lowered overhead costs, eliminating the need of increasing their charge master and keeping costs of services low and quality high.
ABOUT WOOSTER AMBULATORY SURGERY CENTER
Wooster Ambulatory Surgery Center (WASC) was built in 2008 when a group of area physicians recognized the need for a high quality and lower cost medical facility option for the local community. Built as a multi-specialty ambulatory surgery center, WASC has increased the number of cases performed on a yearly basis and in 2016 performed more than 4,000 surgeries/procedures. WASC serves five counties in rural northeastern Ohio and has a high number of self-pay patients as it serves the Amish communities in its area. WASC is highly committed to providing high quality care at an affordable price in an environment that staff would be proud to bring their own families.
View the WASC page in the 2017 Intalere Best Practices Compendium.
Expiring medical devices represent significant financial costs to healthcare institutions, but also represent a risk to patient safety. An issue that is many times dismissed as a ‘cost of doing business,’ expiring inventory is a problem that required University of Chicago Medicine (UCM) Supply Chain to effectively engage clinicians and suppliers in order to create a systemic solution.
UCM implemented a process designed to prevent expiration of inventory with a collaborative effort from inventory management and sourcing teams, as well as suppliers. This data feeds into a dashboard, which is utilized by leadership to track which suppliers, stockrooms and value analysis teams have the highest value of expiring inventory in the next 90 days, as well as total risk of expiration over the next 10, 30, 60 and 90 days. The dashboard also shows the dollar value and number of items expired in the last week in addition to what was avoided through supplier swaps.
Since implementation of the new process in August 2016, UCM’s expired product rate has decreased by 40%. UCM shares the data with physicians to determine if the inventory may be used in upcoming procedures, thus avoiding expiration. Additionally, they are able to initiate discussions with the physicians to determine whether items expiring should be reordered at all. Expiring product is now incorporated into UCM’s Supplier Scorecard in order to push suppliers to swap expiring product or put items on consignment.
ABOUT THE UNIVERSITY OF CHICAGO MEDICINE
The University of Chicago Medicine has been at the forefront of medical care since 1927. It is an academic medical center and not-for-profit corporation based in Hyde Park. Its physician-scientists cover the full array of medical and surgical specialties and are University of Chicago faculty members.