Tag Archives: process improvements

Supply Utilization Management (SUM) – Part 2: What it Takes to Achieve Improvement

Peter Cayan

By Peter Cayan, Vice President, and Tracey Chadwell, Senior Director, Advisory Solutions

In part one of our supply utilization management discussion, we began by defining the concept of supply utilization management and explained how so many aspects beyond initial price affect your true cost. In this post, we’ll review how you can build a culture to achieve sustained improvement in support of the quadruple aim of improving patient outcomes, improving patient experience, improving care team experience and lowering the overall cost of care.

An Intalere member at a regional medical center in the western U.S. uses an analogy to explain how to achieve “improvement” to his staff by using the sport of throwing darts. This sport requires practice and dedication, and the more you focus on throwing at the bullseye, the tighter the group will be over time. You might not ever get all the darts in the little red dot, but it will be pretty close.

This, generally, is the goal of any process improvement program – get everyone in the organization to throw those darts (products and services) as close to the bullseye as possible. Hence, maximizing the pursuit of “the aim.”

Utilization management is your bullseye and theoretically your darts could represent any of the products and services that exist within the organization. The end-state goal should define what it is the team wants to achieve. If the team is not involved in formulating the target plan, and goal, buy-in will be hard to achieve.

A key element of getting to “yes” here is the critical requirement of having a defined, transparent and measurable decision-making process. Without this key fundamental team process, all bets are off for hitting the bullseye. It takes the whole organization to make this happen. You want to stack the opportunities and build a standard for identifying prospective wins and tracking progress throughout the organization.

You must develop a function-oriented, systematic team approach for providing, designing or investigating the right functions (primary, secondary and aesthetic) for the products, services and technologies that are required to operate a healthcare organization. Your process should be one which:

  • Takes product/service/technology evaluation and management of supply expense from subjective to objective.
  • Uses a formal, customized and collaborative process.
  • Is data driven (related to clinical efficacy, safety, quality).
  • Is supported by clinical documentation and an evidence-based approach.
  • Determines true requirements/function/purpose.
  • Benchmarks against best practice.
  • Promotes the standardization of products that are clinically efficacious and provide the highest quality care, customer satisfaction and safety to patients in the most cost-effective manner.

Ultimately this builds a long-range planning process that identifies gaps in supply strategies and is successful in creating new behaviors that allow for adaptation, evolving policies and procedures that tackle hurdles threatening success and ultimately yield savings that are real and achievable.

We Can Help. Intalere helps you better understand the strategic nature of supply chain and provides resources that can assist in bringing efficiency and savings to every area of your supply chain. Reach out to see how we can help. Contact Customer Service at 877-711-5600 or customerservice@intalere.com or your Intalere representative.

Why Standardization and Commitment in the Supply Chain Makes Sense

Brent-Johnson-Intalere-President-and-CEOby Brent Johnson, Intalere President and CEO

Today’s healthcare supply chain professionals are eager for frameworks that can assist them in analyzing and improving their supply chain for maximum effectiveness. One of the most direct and effective ways to streamline processes and reduce costs is through standardization and volume commitment.

Identifying and eliminating duplication, in some cases helping or guiding providers to use less of something or eliminating its usage entirely, is very important. By eliminating redundancies in supplies, facilities are better able to commit to, and contract with, suppliers to negotiate improved rates. Supply chain data analysis can also provide opportunities for the use of comparable products that can drive costs down dramatically. In many situations, similar products from different manufacturers can be reviewed and declared comparable. The best price then becomes a leading differentiator. Also, in some cases, the same product by different distributors can be found at different costs.

As you begin to work through a standardization strategy, early on, it is generally smart to stay focused primarily on med-surg categories where price is the primary differentiator, and aggregation is the correct strategy. Further, leveraging a standardization strategy for these types of categories can help your organization deploy internal resources to other value-added areas.

In addition to direct cost reduction through better pricing, standardization will also bring down the number of SKUs present within your system. Each SKU stocked within a system adds inventory and maintenance costs. Reduction in SKUs helps reduce the overall expense of inventory management activities, and helps increase supply chain effectiveness.

Finally, product standardization is a platform upon which practice standardization can be built. Less product variation can aid clinicians in improving clinical efficacy through increased familiarity with a single product. It also decreases the need for cross training across different product lines at different system facilities.

Personal preference on certain items does not assist in reducing costs or necessarily ensure a better patient experience or better outcomes. While some exceptions are valid in individual cases, the reasons why individuals or departments deviate from standardized purchasing practices are usually subjective and not grounded in evidence. According to Intermountain Healthcare’s Dr. Brent James and several other nationally-recognized experts on variation, inappropriate variation is a known cause of poor quality and outcomes.

For an in-depth look at how a standardization and commitment program can bring cost reduction and better clinical results, read this success story on how Intalere collaborated with owner Intermountain Healthcare to bring nearly $3 million in savings, process improvement and enhanced clinical outcomes.