CQO Investment Begins with Supply Chain

April 2017

Prime Vendor: Getting the Most from Your Most Important Supplier

By Jeff Girardi
HIDA Director of Industry Affairs

Clinical staff may be spending too much time on materials management functions, according to recent industry data. While this trend may be a short-term labor solution for some healthcare providers, its long-term effects could negatively impact organizational efforts to improve cost, quality, and outcomes measures.

A new survey published by Cardinal Health finds that hospitals report better supply chain management not only leads to better quality of care, but supports patient safety as well. Although a majority of respondents rate their supply chain processes as “good,” approximately 24 percent of hospital staff have seen or heard of expired products being used on a patient, while 18 percent recall an instance where a patient was harmed due to a lack of necessary supplies.

“We commissioned this survey to understand how the supply chain impacts hospital staff across all roles – supply chain administrators, service line leaders, physicians, and nurses,” says Scott Nelson, Senior Vice President of Supply Chain, Cardinal Health. “We want to ensure that supply chain is not only a key business tool, but also an essential component in supporting patient safety and care.”

Frontline clinicians recognize the potential gains in patient satisfaction and safety that can be realized from reallocating current time spent on inventory management and supply chain functions. In fact, physicians and nurses currently spend 20 percent of their average workweek – or two hours each shift – on these tasks, which is time they would dedicate to patient care, research and education, or new staff training if given the opportunity.

Financial demands are the single greatest challenge facing surveyed organizations. More than half of administrators rank cost management as their number one factor for success. But asking clinical staff to handle manual inventory functions instead of investing in new, automated, and data-driven supply chain technologies is a cost-cutting measure that may not be tolerated much longer. According to respondents, improvements are long overdue; one-third believe their facility hasn’t introduced a new inventory management system in six or more years, while 25 percent don’t know if a new system has ever been implemented.

“We believe supply chain automation and analytics are the next frontiers for improving care,” says Nelson. Suppliers like Cardinal Health have identified radio-frequency identification (RFID) technology as a valuable resource for helping providers automate inventory tracking and utilization. In addition to inventory holding cost savings, the technology has been shown to reduce labor hours spent on product ordering, eliminate overnight shipping costs resulting from stockouts, and automate expiration and recall alerts to support patient safety initiatives.

Bottom-line costs almost always factor into an organization’s decision-making process when considering new investments. Unfamiliarity with new technologies and getting stakeholder buy-in also contribute to hospitals’ slow adoption of supply chain process improvements. It’s Nelson’s hope that providers use these survey results to assess how well their inventory system supports patient care – Cardinal Health launched a free Inventory Management IQ quiz in conjunction with its survey release – as well as to advocate for a healthier supply chain.

“Delivering high-quality care more effectively should be a top priority for every provider,” Nelson adds. “Everyone at the hospital plays a role in advocating for a more efficient supply chain that allows physicians and nurses to put their time to its best use.”

From: http://www.jhconline.com/cqo-investment-begins-with-supply-chain.html