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IT-POWERED PROCUREMENT AND PAYMENT SAVES TIME, MONEY
Second only to labor-related expenses, the supply chain accounts for as much as 40 percent of a hospital's costs. It also is one of the last areas to reap the benefits of automation. Hospitals historically have spent a fraction of what other sectors can devote to technology, and the supply chain receives just a small portion of that limited budget. Still, thoughtful investments in the materials management process can pay for themselves in cost and time savings.
A key goal of technology-enabled supply chain management is gathering detailed information to use in analyzing and managing the system. Technology offers hospitals a powerful tool to streamline workflow and reduce expenses: Automating a once error-prone and labor-intensive process can improve ordering, shipping, receiving and storing, and reordering and paying for medical supplies.
So-called e-procurement tools synchronize a hospital's product and pricing data with suppliers' and distributors' information and confirm for materials managers that the prices they're paying match contract prices. Supply chain experts say such coordination translates into 1 percent to 3 percent savings on a hospital's total medical supply spending. Additionally, detailed data help managers make informed decisions about contracting, purchasing, inventory management, transportation and deployment of employees. It also allows physicians and surgeons to work with materials professionals to develop programs to standardize on expensive medical devices, and in some cases it can even help tie medical supplies to patient outcomes and quality initiatives.
Many Most Wired hospitals are turning their attention to automating the supply chain and achieving significant results, both in cost savings and productivity improvement. Here are profiles of three.
BETH ISRAEL DEACONESS MEDICAL CENTER, BOSTON
Beth Israel, a member of the CareGroup Healthcare System, makes extensive use of supply chain technology not only to streamline its materials management process, but also to attack the high costs of purchasing equipment and expensive surgeon-preference items.
The medical center implemented computerized provider order entry in 2001. Patient safety issues aside, the technology has changed how physicians order specialty items, and CIO John Halamka, M.D., thinks it has had a measurable effect on costs. By standardizing supplies and medications and by eliminating errors attributable to bad handwriting, he estimates Beth Israel can save $1 million or...