Hospitals can tighten their supply chains--with less supply

The supply chain can help hospitals optimize resources and be more efficient--as long as hospitals reduce their supplies, Richard Kunnes, M.D., CEO of the Sevenex Group, said during Becker's Hospital Review's annual meeting in Chicago on May 10.

Kunnes told Becker's that hospitals need to stop buying what they don't need and convert expenses into revenues. "In our experience, it's particularly beneficial for hospitals with positive operating margins of 5 percent or less--which is probably 90 percent of all hospitals today, or 95 percent of non-profit hospitals," he said.

In some instances, hospitals can avoid purchasing some products altogether, such as supplies associated with hip replacement procedures commonly covered by Medicare. Kunnes said items like floor disinfectant and surgical shoe covers don't actually reduce the rate of infection so hospitals don't need to buy them. Another example is bed linens--they're often washed daily, but disintegrate quickly. Kunnes suggests only washing linens every three days; a safe option that would save hospitals a substantial amount of money.

"It's not about discounts," Kunnes said during the meeting, "it's about use." Hospitals also can save money by drawing less blood, and discontinuing preventive antibiotics for patients after surgery, he suggested.

Meanwhile, HIT Consultant turned to Bruce Johnson, CEO of GHX, a healthcare supply chain management software/services company for advice on how hospitals can save money and be more efficient. According to Johnson, five ways for hospitals to stay productive and efficient despite constant healthcare reform changes are as follows:

  • Automate manual processes
  • Establish efficient trading partner relationships
  • Reduce waste/excess product
  • Capture data for business requirements
  • Enable automation within regional care networks

"Healthcare has two choices: dig in or embrace change. 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," Johnson said.

Inefficiencies across the healthcare spectrum cost hospitals billions every year--just recently, FierceHealthIT reported that old communications technologies cost hospitals $8.3 billion every year.

To learn more:
- read Kunnes' suggestions in the article
- read Johnson's tips in the post

Related Articles:
Old communications technologies cost hospitals $8.3 billion per year
Study: Evidence-based pathways save money without cutting hospital revenue
Hospital CEOs navigate the transition from volume to value
Hospitals must move from hospital-centric models toward value-based care

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