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How A Periodic Update Of Your PAR Levels Can Save Your Hospital Millions

August 16, 2018Sri Mandava Cath Lab Cost Reduction Hospital Finance Hospital Management Operating Rooms Operational Efficiency Radiology Supply Chain The Business of Surgery

PAR levels (or periodic automatic replenishment levels) have been used in industry for decades to help businesses of all kinds keep just the right amount of inventory on hand without suffering from excess. Many hospitals solely rely on “gut feel” in order to understand how many items of each product type they should keep on hand at any given time. The lack of understanding of the utility of PAR levels, and the lack of data to periodically update those PAR levels, could be costing the average hospital millions of dollars in bloated inventories.

Why PAR levels are important

PAR levels are set to establish the minimum and maximum number of units of any given item that should be in inventory at a single time. Whenever the number of items in inventory falls below the minimum PAR level, a re-order should be placed up to the maximum PAR level (or the minimum if only the minimum PAR level has been established). The optional maximum PAR levels are set to keep you from holding too much of an item in stock and risking expiration.

Many hospitals have traditionally relied on the experience of the inventory management techs and nurses to keep their shelves stocked with needed implants and supplies. However, managing based on “gut feel” and instinct almost always results in either too much or too little inventory being ordered. Improperly managed inventories result in excess costs from rush orders for under-ordered inventory, and expirations and unnecessary carrying costs from over-ordered inventory. In this era of healthcare, when every dollar is being scrutinized in an effort to cut out waste, this bloat is now an expense most hospitals cannot afford.

Why hospitals struggle to set PAR levels

In discussions with hospitals, we have seen that the primary driver of poorly managed or non-existent PAR levels is the lack of data available to make optimal decisions. PAR levels are dependent on several variables, including the frequency of use and re-order or lead time. Without the right data to manage PAR levels, hospitals tend to overstock their inventories. This is perfectly valid in an environment where running out of an implant or supply isn’t just an inconvenience, but can also put someone’s life in jeopardy. However, it doesn’t have to be this way in today’s world where data is more reliable and readily available than ever before. You don’t need to rely on “safety stock” or items hidden away for an emergency to ensure that you have the right amount of supplies on hand. The right data if utilized properly will make sure you have everything you need when you need it.

How to settle on the “right” PAR levels

There is no “right” answer when it comes to setting PAR levels, so hospitals have to rely on a combination of data and experience to get to a reasonable decision. There are several factors at play when it comes to setting PAR levels within a hospital environment. One needs to strike the right balance between setting PAR levels too low – resulting in out-of-stock situations – and setting PAR levels too high – resulting in bloated inventories and increased administrative overhead to manage them. Inventory managers also need to factor in how critical a supply is in case they run out, and there are also some critical items that must be kept on the shelf “just in case”, even if used very rarely.

When setting PAR levels, make sure to have a very reliable, accurate and readily available set of usage data for all of your supplies and implants. As you may stock hundreds or even thousands of different items, start by working from the most expensive items on down, as savings with the most expensive items will have the biggest impact on your department’s financials (the 80/20 rule typically applies as the top 80% of your supply spend will be on around 20% of your products). You’ll need to come up with standard criteria to evaluate your usage – such as calculating the average use in a given period, or the maximum use in a given period – to understand where to properly set your PAR levels. By going through this exercise one product at a time, you’ll quickly realize that your current on-hand inventory has major opportunities for right-sizing. Each dollar that you can trim from your on-hand inventory is like a dollar that you have just given back to your department to invest elsewhere.

Where to get the data needed for setting PAR levels

Hospitals often have a challenge getting their hands on reliable and accurate usage data for their supplies. Ordering data is typically easier to access than usage, but do not use this data as it will include data for items that are being over-ordered, or that are being ordered to replace expiring items and not necessarily used, and your actual needs for certain products will be overstated as a result. Without trustworthy usage data, you will not be able to make optimal decisions regarding PAR levels.

If getting your hands-on high-fidelity usage data is currently a challenge, consider a system like iRISupply from Mobile Aspects. This hospital inventory management software will arm you with the data you need to move to a just-in-time inventory environment that eliminates excess. It also allows for perpetual inventory management due to the real-time nature of the on-hand data in iRISupply’s smart cabinets. iRISupply will not only provide you with the usage data you need, but will take it one step further and provide actionable recommendations about where you can set your PAR levels to eliminate waste. Mobile Aspects supply chain experts will also sit down with you quarterly as part of a best-in-class customer success program to discuss strategies to optimize your PAR levels and review the data behind those suggestions.

A community hospital in Illinois recently used data coming out of the iRISupply system to evaluate its PAR levels in the electrophysiology (EP) labs. Using the data and recommendations from iRISupply, they were able to eliminate nearly 50% of their owned inventory, and save over $300,000 just in their EP labs. They estimate that performing this same analysis across their procedural departments will result in over $1.5 million in savings for the hospital.

How To Turn Supply Chain Waste Into A Revenue Opportunity

August 9, 2018Sri Mandava Cost Reduction Hospital Finance Hospital Management Supply Chain The Business of Surgery

The healthcare supply chain is increasingly being looked at as a new frontier in hospital cost containment. With the supply chain making up the 2^nd largest expense category for healthcare providers, there is ample opportunity to drive costs out of the supply chain to boost profitability at hospitals.

What if there was a way to turn some of the identified supply chain waste in to a revenue opportunity? With the advent of online marketplaces for 2^nd hand goods, this is becoming a real possibility for hospitals. As this article by Jacqueline LaPointe at RevCycle Intelligence explains:

“Wasted supplies cost a provider organization. They can increase an organization’s overhead, which ultimately makes all costs at the organization higher.

But what if there was a way to recoup some of that wasteful spending?

Transforming the large cost center into a revenue-generating department may seem like an impossible task to most healthcare executives. But a health system in Colorado is actually seeing some money come in from their supply chain, rather than coming out of it.

The health system started seeing some revenue come in through their supply chain after participating in a web-based marketplace for healthcare supplies and equipment about three years ago.

Since then, the system has sold everything from an excess number of catheters to hospitals beds after the health system upgraded their beds.

“I’m the only one in the supply chain department who makes money,” a Project Coordinator at the health system recently told RevCycleIntelligence.com. “In supply chain, we spend money. That’s what we do. At the end of the day, it’s great to actually recoup some of the cost.”

The health system started to bring money in through the supply chain by pursuing her passion for recycling at the health system.

“When I started at the health system I started out as an administrative assistant for the Director of Supply Chain and I was absolutely astounded when I discovered they had absolutely no recycling, particularly with purchasing,” she said. “We would get catalogs upon catalogs. A lot of those just go into the bin.”

Looking for a way to reduce waste at the health system, she created a green team that focused on waste reduction and sustainability improvement in the supply chain department. As those initiatives progressed, the health system realized the potential value in scaling up some of the projects.

“As these clean-outs occurred more often, it became more evident that we needed somebody in there who could come in and help by not just putting everything in the trash and figuring out different ways to either reutilize or donate whatever we can, but to keep it out of the waste stream,” she explained.

That’s when she decided to use H-Source, a web-based marketplace dedicated to helping hospitals across the country connect to sell and purchase supplies and equipment. The no-contract, no-cost platform allowed her to put her health system’s excess or unused supplies up for sale.

“The sky is the limit,” she said in response to what type of items she can sell on the marketplace.

“Typically, we sell items out of the OR. Specifically, sutures, catheters, probes, forceps, and forceps tips. Those are a lot of what we’re able to get rid of in the disposable world,” she added. “As far as equipment, probably the largest thing we’ve done is a bed conversion and we sold 41 beds to a facility in Brooklyn, New York. The beds were about ten years old. We’ve also done a lot of stretchers.”

The health system is currently working on moving ventilators that hospital leaders have retired out of the system.

She emphasized that her health system’s excess supplies and equipment are still in good shape and ready for use elsewhere. The marketplace ensures that hospital buyers can view product expiration dates, model numbers, manufacturer information, and more on every item for sale so hospitals do not purchase low-quality items.

With the aid of the marketplace, hospitals are buying high-quality supplies for a discounted rate compared to the prices set by manufacturers. But that doesn’t mean that the health system isn’t making a profit by selling its excess products for less than they bought them.

The health system makes a profit on every item sold because those were products that “we weren’t getting any benefit from it anyways,” she said. The items would either be thrown away or donated, bringing in zero revenue for the health system.”

Read the entire article here: How Hospitals Bring in Revenue Through the Healthcare Supply Chain

Having the right data can be a powerful tool in optimizing supply chain strategies. As this article shows, your data can tell you what items you no longer need to keep in inventory. This can allow you to turn items that you may have previously kept on the shelf and re-ordered upon expiration into real dollars by selling your current inventory and eliminating any future orders. If your organization lacks the proper tools to provide powerful data around your supply chain spend, consider systems such as iRISupply which can collect real-time data around supply and implant usage using RFID technology and provide actionable insights to help optimize your stocking levels and other powerful recommendations. Data analytics included with the software will give specific recommendations on which items to reduce or eliminate, and which items should be owned vs. consigned, leading to millions of dollars in cost-savings opportunities.

Hospital Inventory Management In A Data-Driven World

July 31, 2018Sri Mandava Big Data Cost Reduction Hospital Finance Hospital Management Operational Efficiency Supply Chain The Business of Surgery

As hospitals grapple with increasing costs and declining reimbursements, reducing expenses has become an important tool for hospital CFOs to use to improve profitability. This contrasts greatly with hospital strategies from a decade ago that relied solely on increasing revenues to increase profitability.

Key areas that hospitals have been focusing on are their labor and materials costs. While controlling labor costs is a mathematical equation that is well understood, materials costs continue to be an area that is ripe for cost-cutting for almost any hospital. Hospitals are plagued by overstocked inventory and expiring items, and this has been the case for decades with no tangible improvements happening at most hospitals. With the proliferation of data analysis tools within hospitals, there is now the real opportunity to make meaningful cost reductions in hospital supplies and implants. As this article by Rachel Z. Arndt at Modern Healthcare explains:

“Within every hospital, supply problems are likely to lurk. Often, they’re problems of too much: too many sutures, too many surgical staplers, too much of too many items. Hospital staff, distrustful that they’ll have what they need when they need it, err on the side of excess.

But that’s beginning to change, as hospitals and health systems employ software with predictive analytics for inventory management. That way, they can forecast demand, reaching a Goldilocks level of supplies.

“The natural tendency is to just buy an entire mountain of inventory,” said Rick Conlin, a partner in the Advisory Board Co.’s spend performance solutions team. “Turning to some of these enterprise research tools gives them the ability to more confidently knock back some of that inventory and supply chain costs.”

Users of these inventory management tools will have to integrate them into their existing systems, and they’ll also have to learn to trust the data. That’s beginning to happen more, as ever-mounting costs are putting pressure on providers and health system staff to act.

The return on investment is fairly straightforward: As health systems use more advanced supply chain software, they free up cash, which they might use to buy new equipment or hire another physician—activities that generate revenue.

“If you can reduce the inventory you have on hand, it really can have a positive financial impact,” said Rob Austin, associate director at Navigant. And, he added, “if you’re managing your inventory more closely, you won’t lose it, it won’t become obsolete or expired, and you can run a more efficient operation.”

…

More efficient inventory management means not only cost savings but also better quality care, Spectrum’s [Bill] Selles said. Right now, he said, “we have the approach of more inventory is better, because the risk of running out of a critical supply is harm to a patient.” But because of that, there’s a lot of waste.

What’s more, if a hospital doesn’t manage its inventory well and a medical device recall is issued, for instance, the supply chain staff might not know if their devices are affected.

The problem of expiration dates isn’t unique to healthcare, Selles said, but its effects are potentially more profound. “If I work for Target and we expire a pallet of yogurt, that’s a problem, but it’s a wholly different story than if I expire medical devices that end up in point-of-care situations,” he said.

Even so, getting providers and supply chain staff to use these newfangled systems can be tough.

“Even within the past five to eight years, I’ve seen hospitals go out and buy demand and supply planning tools, and they don’t trust them,” Conlin said. “Or they’ll work back channels and maintain spreadsheets.”

But things are looking up, albeit not for ideal reasons. “Physicians, just in understanding how dire some of the finances can be, are starting to play nice,” he said. “There’s trust in performance.”

Read the entire article here: Hospital supply inventory management creating a cottage industry for technology

Having the right data can be a powerful tool in optimizing supply chain strategies. As this article shows, having accurate data and using it in the right way can lead to incredible cost savings opportunities for hospitals and health systems. If your organization lacks the proper tools to provide powerful data around your supply chain spend, consider systems such as iRISupply which can collect real-time data around supply and implant usage using RFID technology and provide actionable insights to help with vendor negotiations, on-hand inventory levels and owned-consigned mix. Powerful data analytics included with the software will give specific recommendations on which items to reduce or eliminate, and which items should be owned vs. consigned, leading to millions of dollars in cost-savings opportunities.

How Patients Are Being Coached To Question Their Hospital’s Scope Cleaning Practices

July 25, 2018Sri Mandava Hospital Management Infection Control Managing Endoscopes Patient Safety Regulatory Compliance

With the numerous reports coming out lately about the difficulty in cleaning endoscopes and ensuring complete disinfection, the mainstream media has started to coach patients on how to select a hospital that’s right for their scope-related procedures. With the concern for scope safety increasing every day, facilities must now prepare to answer tough questions about their scope-related infection rates and disinfection practices from potential patients.

A recent article by Emily Bazar of the Sacramento Bee shined the spotlight on the risks that patients take by blindly trusting their care provider to conduct a safe scope-related procedure. As the article explains to readers:

“Physicians use a variety of reusable medical scopes to peer into the body — and they can pose a deadly infection risk when not cleaned properly.

Complicated scopes called duodenoscopes, used to inspect and treat problems in the bile and pancreatic ducts, have been linked to at least 35 deaths in the U.S. since 2013, including three at the UCLA Ronald Reagan Medical Center.

But less complex scopes also pose contamination risks — and they’re used on far more people: Each year in the United States, doctors perform more than 15 million colonoscopies and 7 million endoscopies of the upper GI tract.

Two recent studies underscore the threat: A paper published in March found that 71 percent of reusable medical scopes deemed ready for use on patients tested positive for bacteria at three major U.S. hospitals.

Then a May study concluded that infection rates are far higher than previously believed after colonoscopies and upper GI endoscopies. For instance, the infection rate within seven days of a routine colonoscopy at an outpatient surgery center is roughly 1 in 1,000, the Johns Hopkins University study determined.

It was previously thought to be about 1 in a million.

Susan Hutfless, senior author of the May study and an assistant professor at Johns Hopkins, says she was “very surprised” by the findings, adding that patients must start grilling doctors about treatment options and the cleanliness of the scopes.

You shouldn’t do it as I did at my first colonoscopy in January: I was on the gurney, waiting to be rolled into the operating room when I asked the doctor, “Your scopes are clean, right?”

You can guess what he said.

I might have asked earlier but, as Hutfless says, “the more people ask, the more cleanliness will improve.”

No matter which scope procedure your doctor recommends, start by applying a risk-benefit analysis to your situation, experts say.

In the case of colonoscopies, which can detect colon cancer, many experts believe the benefit outweighs the risk of infection.

“Colonoscopy saves lives,” says Dr. James McKinnell, assistant professor of infectious disease at UCLA and the LA BioMed research institute. “The benefit is a reduction in the risk of death.”

Besides, most infections related to scopes are treatable and short-lived, adds Sylvia Garcia-Houchins, director of infection control for the Joint Commission, which accredits many U.S. hospitals and surgery centers.

As part of your deliberations, consider discussing potential alternatives with your doctor, says Lisa McGiffert, former director of Consumers Union’s Safe Patient Project and now a member of the Patient Safety Action Network. “I would say, ‘Is there another procedure that you could identify that’s not invasive?’”

If there isn’t, start asking questions.

First, make sure you’re seeing a reputable provider with lots of experience. Ask how many procedures he has performed. If yours is the first, or among the first few, consider going elsewhere or asking for someone to supervise the procedure.

You can also ask your doctor if she knows the facility’s infection rates, says McGiffert, who is based in Austin, Texas. “If they say no, I would say ‘Why not? Why aren’t you keeping track of this?’”

If your doctor gives you an infection rate but it’s confusing, remember: “The closer to zero the better,” McGiffert says.

Next, ask about the facility’s scope-cleaning process. McKinnell offers some questions: Do you clean and reprocess your scopes? Do you hang them to dry in a place that is clean? After they’ve been cleaned, do you check them for contamination?

Without wading into every scientific detail, you want to get a general sense that the doctor or facility has an established cleaning process.

“I want to know there’s a person cleaning the scopes who’s dedicated to cleaning the scopes. If they are, they’ve got the system down pat,” Garcia-Houchins says.

You can also research whether a hospital or surgery center in your area uses single-use endoscopes, which are becoming more accepted and prevalent. Ultimately, trust your gut.

“If you don’t feel comfortable and those alarms are going off, you need to stop the bus,” Garcia-Houchins says. “You just have to do it.”

Damare agrees. After her bout with sepsis in August 2016, which she says sucked the life out of her for a year, she doesn’t plan on getting a colonoscopy again. But if you do, remember that you — not the doctor — are in charge, she advises. “This is your whole life,” she cautions. “You have to feel really good about what your choice is.”

Read the entire article here: Time for that colonoscopy? Ask your doc first on how the scopes are cleaned

The infection risk with flexible endoscopes continues to be a major worry for patients and hospitals alike. Facilities must ensure staff are trained on general infection control principles and must adhere to reprocessing best practices, and they must be prepared to discuss the risks of endoscope-related procedures with their patients. To ensure that your staff is following reprocessing best practices on every scope they disinfect, install additional checks and balances into your workflow so that you can document that your staff is following the same process each time. Software systems such as iRIScope have been introduced in recent years to help hospitals and surgery centers ensure that each of their flexible endoscopes is reprocessed the proper way each time, and documentation of their reprocessing is kept electronically using advanced RFID technology. These systems safeguard the scope disinfection process by employing machine-based data processing to determine of scopes are adequately reprocessed before their next use. With these systems in place, staff and patients can be more confident that their endoscope-related procedure won’t result in an infection.

UDI One Step Closer To Reality

July 18, 2018Sri Mandava Big Data Cath Lab Clinical Documentation Hospital Finance Hospital IT Hospital Management Operating Rooms Operational Efficiency Patient Safety Radiology Regulatory Compliance Revenue Cycle Supply Chain The Business of Surgery Tissue Management

The United States Food & Drug Administration (FDA) and its European equivalents are currently conducting a real-world pilot aimed at bringing unique device identifiers (UDIs) one step closer to reality. UDIs have been a long-term dream for many in healthcare, who view the ability to track and trace medical devices using unique item-level codes as a true game changer for patient safety and documentation quality.

The end result of the UDI implementation worldwide will be unique labels affixed to each medical device that will allow patients to know exactly what devices were used on them in case of recalls or other safety issues. Hospitals will also become more accurate with their documentation due to the ease of scanning a unique bar-code rather than keying in information manually or scanning multiple bar-codes to get the same information. This article from Greg Gillespie at Health Data Management provides further details on the current UDI test:

“The study, dubbed Blueberry Castle, is trying to simplify the byzantine processes used for labeling and tracking medical implants.

Wickenburg (Ariz.) Community Hospital, one of the sites where new tracking and scanning technologies are being tested, struggles with trying to document—and get reimbursed for—all the implants it uses, says Richard Wedig, chief officer of surgical services at Wickenburg, which has a 19-bed acute care unit and serves a vast rural area in Arizona northwest of Phoenix.

“When you’re documenting by hand every plate and screw that’s being used for a knee replacement, there’s a lot of documentation you’re trying to do right in the OR,” Wedig says. “It’s a two-fold problem: from a patient safety perspective, you want to ensure you know exactly is being implanted in case of product recalls and other safety issues that crop up. And in regards to reimbursement, we have had problems when our records don’t match up with the manufacturer reps, so we have problems with documentation and reimbursement. There’s too many chances for human error right now.”

…Wickenburg is one of 40 hospitals in seven countries participating in the study. GSI, which creates a the vast majority of barcodes worldwide, as well as device manufacturer B. Braun Melsungen, Matrix IT and a number of associations including the American Hospital Association and the Association of Peri-operative Registered Nurses, are contributing either technology or expertise.

In addition, Google is providing some expertise to the group, says Brandon Donnelly, chief technology officer at Matrix IT. Google hosted study participants in its Belgian offices to brainstorm about how to tie together products and services for the effort, he adds.

Donnelly, for one, believes the study will be the first step in a complete overhaul of how the medical device industry operates. “There are so many manual processes being used right now that are inaccurate, not to mention technologies, like clips added to implants, that can be dangerous to patients,” he says. “The technology exists to create an end-to-end tracking for each and every implant. At its heart, the study is aimed at breaking the manufacturers’ stranglehold on data about implants, and giving it to patients and providers.”

Read the entire article here: International UDI effort for implants gets real-world test

With data accuracy around implants and medical supplies a constant source of frustration for hospitals, the roll-out of UDIs will bring a sea change to the healthcare system. To make sure you’re ready for the UDI roll-out, consider a system like iRISupply that targets the procedural areas of a hospital, where hospitals spend and make 50% of their dollars. The system Is UDI-ready and gives all the anticipated benefits of UDI today by using RFID technology to track supplies down to the item-level. The software will arm your hospital with the data you need to make inventory optimization decisions that will provide a large and sustainable ROI to your hospital. iRISupply will not only provide you with data, but will take it one step further and provide actionable recommendations that will allow you to cut costs in your surgical supply chain. Mobile Aspects supply chain experts will also sit down with you quarterly as part of a best-in-class customer success program to discuss strategies to optimize your owned/consigned inventory mix and review the data behind those suggestions.

Cost Control Takes Top 2 Spots In Survey Of Priorities For Hospital Executives

July 11, 2018Sri Mandava Cost Reduction Hospital Finance Hospital Management Operational Efficiency Supply Chain The Business of Surgery

The Advisory Board recently shared the results of its Annual Health Care CEO Survey. The survey asked hospital CEOs to rank their concern over a wide range of topics across the healthcare spectrum. In a break from prior years, both of the top 2 concerns revolved around cost structure and management.

While growing their hospitals continues to be a key priority at many health systems, the survey reveals that in the current healthcare market controlling costs is becoming increasingly important for those at the executive level. With providers getting squeezed by declining reimbursements on the top end and increasing labor and supply costs on the boom end, hospitals are looking for new ways to remain profitable. As this press release from Advisory Board notes:

“The new No. 1 concern for hospital executives is preparing the enterprise for sustainable cost control, according to the nationwide survey of 146 C-suite executives conducted between December 2017 and March 2018. This top concern made its CEO Survey debut this year, and 62 percent of executives said they were extremely interested – more than for any topic in at least four years and 5 percent more than for any topic in 2017.

C-Suite executives voted innovative approaches to expense reduction as the No. 2 topic for the second year in a row.

“Health system CEOs recognize that any effective growth or financial-sustainability strategy must be built on a competitive cost structure in order for their enterprises to deliver high-quality, cost-effective care to the patients they serve,” said Christopher Kerns, executive director, Research at Advisory Board. “The entrance of nontraditional health care providers, such as retailers and consumer-focused imaging and surgery centers, adds to the urgency of health systems improving cost structures, sometimes radically so, such as redesigning staffing models, rationalizing service lines across their market, and even transforming their facility footprint.”

The survey asked executives about their level of concern for 33 topics, including building an agile enterprise, strengthening primary care alignment and developing a robust cybersecurity strategy. The Top 5 areas of extreme interest to hospital and health system executives are:

Preparing the enterprise for sustainable cost control (62 percent)
Innovative approaches to expense reduction (56 percent)
Exploring diversified, innovative revenue streams (56 percent)
Boosting outpatient procedural market share (50 percent)
Meeting rising consumer demands for service (50 percent)”

Read the entire press release here: Annual Health Care CEO Survey: Cost Control is Top Priority for Hospital Executives

With rising costs increasingly becoming a concern for hospital executives, look for new and sustainable ways to cut costs across your delivery network. Consider a system like iRISupply that targets the procedural areas of a hospital, where hospitals spend and make 50% of their dollars. The system directly connects with your electronic medical record (EMR) software to ensure accurate and real-time documentation of your expensive implants and supplies to ensure that you are getting paid for the services your hospital is performing. The software will also arm your hospital with the data you need to make inventory optimization decisions that will provide a large and sustainable ROI to your hospital. iRISupply will not only provide you with data, but will take it one step further and provide actionable recommendations that will allow you to cut costs in your surgical supply chain. Mobile Aspects supply chain experts will also sit down with you quarterly as part of a best-in-class customer success program to discuss strategies to optimize your owned/consigned inventory mix and review the data behind those suggestions.

How A Periodic Evaluation Of Your Consigned Inventory Can Save Your Hospital Millions

July 5, 2018Sri Mandava Big Data Cath Lab Cost Reduction Hospital Finance Hospital Management Operating Rooms Radiology Supply Chain The Business of Surgery Tissue Management

There are many reasons why hospitals choose to consign the expensive implants and supplies that they use in surgical settings. However, deciding to consign a product without continuously analyzing that decision can be costing your hospital millions of dollars each year. Read on to find out some best practices when it comes to reducing the costs of your consignment inventory.

Why hospitals stock inventory on consignment

No two hospitals have the same consignment strategy, but there are some common themes about why a particular product may be chosen to be stocked on consignment rather than owned. Among those reasons are:

The need to keep some emergency stock that is seldom used, so the vendor stocks it on their shelves just in case on consignment.
The hospital wants to minimize its exposure to product expiration, so it allows vendors to manage the inventory on a consignment basis and carry the expiration risk.
The hospital has a broad policy for certain medical devices that they will stock them on consignment to transfer management responsibility to the vendor.

Why you need to re-visit consignment decisions periodically

Though many hospitals carry a mix of consigned and owned items, most that we have interviewed do not have a specific consignment strategy. Many times consignment decisions are made due to an offer that the hospital couldn’t refuse, or a particular need that occurred at a moment in time, and that decision is never re-visited again. And many times, a new administrator enters an organization and inherits the consignment decisions of the previous administration and doesn’t bother to re-negotiate those contracts. In any case, many hospitals have a “set it and forget it” mentality where they make consignment decisions based on the information available at that time and never re-evaluate those decisions as the data changes.

This mentality is sure to be costing your hospital money every day. Consignment, while it has its benefits, also has costs associated with it. It should not be used as a one-size-fits-all strategy, nor should it be avoided altogether as a way to save money. Instead, usage patterns of both owned and consigned products should be periodically reviewed to see if a shift in strategy is required.

How to decide whether to own or consign an item

As mentioned earlier there is a cost to consigning items instead of owning them. Products that are on consignment have all of the ownership risk transferred to the vendor, so naturally the vendors charge a premium price for assuming this risk. While the actual costs of consignment vary from vendor to vendor and contract to contract, we have heard anecdotally from multiple hospitals that a consigned product typically costs about 15% more to use than an owned item.

Given that significant premium, hospitals must be smart about which supplies they own and which they consign. From a planning perspective, hospitals should own the products that they use most often, as the expiration risk for those items is minimized and the 15% savings per item used will quickly add up. Hospitals should consign items that they almost never use, or that they keep on hand for emergency purposes only. Another option for these items would be to remove them from inventory altogether to free up valuable shelf space within the hospital and when possible use alternative products instead.

The caveat is that these usage trends change over time. Just because an item is used frequently today doesn’t mean that will be the case 12 or 24 months from now (and vice versa). Data must be reviewed periodically to ensure that the consignment decisions you are making today aren’t costing your hospital money in the future.

So, in the end the keys to a consignment strategy are:

1) Defining a strategy (for more guidance download this whitepaper) and sticking to it consistently across product categories; and

2) Analyzing data periodically (for example: quarterly or bi-annually) to determine if usage patterns across individual products have changed and a switch from consignment to ownership or vice versa is warranted.

Having your consignment strategy well-defined and applying it consistently can save your hospital millions of dollars per year that may be unnecessarily paid to vendors for very little benefit in return.

Where to get the data needed for periodic consignment evaluation

Hospitals do a good job of gathering data for specific decision points, like a request for proposal when the initial decision is made regarding a vendor contract. However, using data to evaluate those decisions later tends to be a challenge. In order to get the necessary data for a consignment evaluation, you must be able to access usage data for each of your supplies that you’re currently ordering. Ordering data is not a good alternative to usage data, as it will include data for items that are being over-ordered, or that are being ordered to replace expiring items and not necessarily used, and your annual needs for certain products will be overstated as a result. Without trustworthy usage data, you will not be able to make optimal decisions regarding product consignment.

If getting your hands on high fidelity usage data is currently a challenge, consider a system like iRISupply from Mobile Aspects. This hospital inventory management software will arm you with the data you need to make the best consignment decisions possible. iRISupply will not only provide you with the usage data you need, but will take it one step further and provide actionable recommendations about which products should have their current consignment or ownership status re-evaluated based on recent data. Mobile Aspects supply chain experts will also sit down with you quarterly as part of a best-in-class customer success program to discuss strategies to optimize your owned/consigned inventory mix and review the data behind those suggestions.

Caught In The Act: Can You Stop Dirty Scopes From Being Stored With Your Clean Scopes?

June 28, 2018Sri Mandava Hospital Management Infection Control Joint Commission Managing Endoscopes Operating Rooms Operational Efficiency Patient Safety Regulatory Compliance

Does this scenario sound familiar to you? Your hospital has a great set of processes and protocols in place when it comes to reprocessing your flexible endoscopes. You even have a great system for logging clean scopes in and out of your scope storage areas. You believe that your staff are properly trained, re-certified and following all of the processes that your hospital has carefully researched and meticulously put into place. But do you really know where all your scopes are going? Do you feel comfortable that only properly trained staff are handling your scopes? And can you guarantee that 100% of the scopes that are going into clean storage are absolutely ready for patient-use?

If any of these issues are in the back of your mind from time to time (or constantly) then read on to see what you can do to help you get better control of your scopes and maybe even help you sleep better at night.

Consequences of Poor Scope Visibility

Hospitals tend to do a great job of making sure that all of the scopes that enter sterile processing or their other scope reprocessing areas are being properly disinfected or sterilized. But many of these same hospitals have very poor visibility into what happens from the time a scope leaves their automated endoscope reprocessor to the time it comes back again for reprocessing. During that time, a myriad of issues could have arisen with a scope that could lead to very negative outcomes for your hospital:

Poor chain of custody issues result in a dirty endoscope being stored with clean endoscopes.
Staff are in a hurry to get the right scope, and in doing so they don’t follow proper safety protocols.
An unauthorized user accessed your scope, resulting in the scope going missing.

These issues could result in compromised patient safety, negative financial consequences or in some cases both.

Poor chain of custody

In the hectic areas of the endoscopy and perioperative suites, a lot of coordination is required between staff members to make sure that operations are running smoothly. Staff have to rely on each other to transport patients, supplies and instruments for each procedure to make sure that the schedule for the day runs smoothly. When it comes to endoscope-related procedures, staff often need to hand off scopes to other members of their team to run to different areas of the hospital.

But what happens when there’s a miscommunication between two staff members? A scenario we have seen is when a team member is in a hurry and asks another member of the team to help them run a scope from a procedure room down to reprocessing. The requesting staff member may assume that the other team member will give the scope its bedside cleaning, or ensure that it has already happened, while the other team member may have assumed that the bedside cleaning already happened. The end result is a scope that missed its bedside cleaning and therefore is reprocessed outside of hospital protocols. Although the scope in question may receive all of the other requisite disinfection steps, the missed bedside cleaning should make it unavailable for patient use until the bedside cleaning steps have first been taken. Instead, because the proper checks and balances aren’t in place, the scope is erroneously hung in clean storage after removal from the endoscope reprocessor.

Staff breaches of safety protocols

Staff in the endoscopy and perioperative areas are often faced with daunting challenges. They are being pulled in several different directions to help make procedures run smoothly. Physicians and nursing staff have their own demands that must be met to ensure the best outcome for the patient, and staff must quickly respond to these demands. When this happens, established processes can be overlooked or skipped even though staff have only the best intentions.

An example we’ve seen many times in these areas is when a staff member brings a certain scope into a room for a procedure, only to be instructed by the attending physician to bring another scope that she would prefer. Knowing that the physician and patient are waiting, the staff member quickly swaps the returned scope for the desired scope in the clean storage area. The new scope is brought and the procedure can continue as planned, but were all the proper procedures followed? Many hospitals have standards that dictate that any scope that enters a procedure room or touches a surface must be sent for reprocessing before the next patient use. In this situation, where the staff member is running quickly through the hospital to ensure the best outcome for the patient, this standard may be overlooked. This breach in protocol is undetectable as the scope that should have been sent for reprocessing is now sitting in clean storage and is ready for another procedure, defying the hospital’s standard.

Lost scopes

People from all over the hospital come into contact with flexible endoscopes every day: techs, runners, SPD staff, nurses, physicians, residents, and so on. With so many people handling scopes, how can you be sure that scopes only end up in the hands of those who need them? Many hospitals have no system at all for logging scopes in/out of clean storage, while many other hospitals rely on an honor system, where people are supposed to sign in/out scopes from clean storage. We have seen in practice that these honor systems typically result in 50% compliance or less, which means that most scopes are taken from clean storage without any record. And with so many scopes hanging in unlocked cabinets or freestanding hooks, anyone can remove any scope at any time and for any reason. Unfortunately, a scope might go missing from time to time, whether with good or bad intentions. In these situations, without a proper audit trail, the scope may go missing for days or weeks, or maybe even permanently, because administrators don’t have any information to turn to for tracking down the missing scope. These situations can result in poor patient outcomes when physicians have to use alternative scopes for procedures due to missing scopes, or financial harm if the very expensive instrument has to be replaced.

There’s a better way: automation

Make no mistake, your situation is not unique. With hospitals having dozens of scopes traveling across multiple floors and buildings, it’s nearly impossible to keep an eye on every scope at all times to make sure that protocols are being followed from a safety and accountability standpoint across the hospital. Systems such as iRIScope from Mobile Aspects have been introduced in the last several years to provide an additional layer of oversight and security for your valuable flexible endoscopes, providing financial and patient safety benefits to your endoscopy practice.

When endoscopes pass through multiple hands during each usage cycle, it is difficult to make sure that everyone is following the correct processes. iRIScope will act as an additional layer of intelligence to challenge any behavior that does not meet hospital guidelines and protect patients from potential harm. If an endoscope does not pass through all of the required reprocessing steps (or skips reprocessing entirely) before returning to clean storage, an administrator will be notified about the breach so they can take the appropriate action. iRIScope will also lock the cabinet that the flagged scope is stored in to ensure the scope can’t be used again until further investigation is conducted and the alert is cleared. iRIScope also allows for hospitals to keep scopes away from those who shouldn’t have access to them. The system’s smart cabinets allow only authorized users to unlock the cabinets and access scopes for procedures. Any personnel or vendors who aren’t granted access will be unable to handle your valuable scopes. Because the cabinets keep track of who is pulling scopes, you also have an audit trail of who accessed a scope last when a scope goes missing and also know which procedure, patient and physician the scope was used for, greatly aiding the process of tracking down your missing scopes.

Gone are the days when you have to rely solely on your own eyes to track the degree to which your staff are following standard operating procedures in endoscopy. iRIScope helps by providing a second set of eyes to ensure reprocessing standards are being followed for each scope every time, safety protocols are being followed across the hospital, and scopes are being handled by only designated personnel. As a Central Sterile Department manager in a major academic medical center in New York put it: “We’re able to hold the staff accountable because they’re logging in and out of the systems with their badge. If someone misses a step at a reprocessor, I can go back and check with the cleaner or check the machine to make sure it was washed properly…I’m not worried about losing scopes any more. I’m not worried about what my staff is doing. It’s one less thing to worry about – I know your cabinets are there and they’re working, and people can’t get around them.”

To get more information on how iRIScope can automate your scope management processes, visit Mobile Aspects website and schedule a demo.

Study Shows Bronchoscopes Still Dirty After Reprocessing

June 20, 2018Sri Mandava Hospital Management Infection Control Joint Commission Managing Endoscopes Patient Safety Regulatory Compliance

A new study has shown that flexible bronchoscopes that were reprocessed according to institutional standards at several US hospitals were still found to be dirty in a majority of the cases. The study was presented at the 2018 Association for Professionals in Infection Control (APIC) Conference.

The study on bronchoscopes now joins other recent studies conducted on colonoscopes and duodenoscopes showing the difficulty in performing high-level disinfection on flexible endoscopes. As this article by Nancy Crotti at Medical Design & Outsourcing explains:

“The results are worrisome as patients undergoing bronchoscopy are commonly at high risk for infection due to transplant status, critical illness, or immune-suppression due to malignancy or chronic disease,” said the study, funded by 3M and supported by sterilization product maker Healthmark Industries. It was presented last week at the Association for Professionals in Infection Control’s annual conference APIC 2018, will be published in an upcoming issue of Chest Journal.

Reusable bronchoscopes are commonly used in interventional pulmonology procedures. They and other reusable endoscopes, including duodenoscopes and colonoscopes, and have been cited in superbug outbreaks in the U.S. and Europe.

The researchers conducted the study at three large hospitals in the United States in 2017, including two transplant centers. They examined 24 clinically used flexible bronchoscopes after they were cleaned and disinfected in accordance with their institutional practices. Contamination was detected using microbial cultures and tests for protein, hemoglobin, and adenosine triphosphate. Reprocessing practices were found to be substandard at two of the three hospitals studied.

After manual cleaning, the researchers found that 100% of the bronchoscopes evaluated had residual contamination. Microbial growth was found in 58% of the fully-reprocessed bronchoscopes, including mold, Stenotrophomonas maltophilia, and Escherichia coli/Shigella spp.

All of the bronchoscopes had visible irregularities, including retained fluid; brown, red, or oily residue; scratches; damaged insertion tubes and distal ends; and filamentous debris in channels. Nursing staff at two of the hospitals were observed handling and transporting patient-ready bronchoscopes with bare hands, potentially exposing the bronchoscopes to contaminants.”

Read the entire article here: Bronchoscopes still dirty after cleaning, study says

The infection risk with bronchoscopes and all flexible endoscopes continues to be a major worry for hospitals. Facilities must ensure staff are trained on general infection control principles and must adhere to reprocessing best practices. To ensure that your staff is following reprocessing best practices on every scope they disinfect, install additional checks and balances into your workflow so that you can document that your staff is following the same process each time. Software systems such as iRIScope have been introduced in recent years to help hospitals and surgery centers ensure that each of their flexible endoscopes is reprocessed the proper way each time, and documentation of their reprocessing is kept electronically using advanced RFID technology.

The 4 Steps Of An Endoscope Risk Assessment

June 14, 2018Sri Mandava Hospital Management Infection Control Joint Commission Managing Endoscopes Patient Safety Regulatory Compliance

Flexible endoscopes continue to make headlines due to the risk of infection stemming from their use on patients. Many hospitals find themselves in the unenviable position of determining how they can perform critical endoscope-based procedures while minimizing the risk of infection. There is ample evidence showing that endoscopes can spread life-threatening illnesses when not properly reprocessed, however the benefits of endoscope-based procedures continue to outweigh the risks.

Now would be a great time for hospitals to conduct a risk assessment of their endoscopy practice. Making sure that hospitals are prepared for the adequate reprocessing and maintenance of endoscopes is required to ensure the safety of their patients. This article by hpnonline.com gives solid advice for any hospital conducting a risk assessment: Safer scopes

As the article mentions, hospitals wishing to conduct a risk assessment can follow 4 steps:

Completing a detailed inventory of their scopes
Identifying and recording risks associated with each of their scopes
Conducting a thorough review of literature from various societies concerned with endoscope safety
Determining mitigation strategies for endoscope safety

The infection risk with endoscopes continues to be a major worry for both surgery centers and hospitals. Facilities must ensure staff are trained on general infection control principles and must adhere to reprocessing best practices. To ensure that your staff is following reprocessing best practices on every scope they disinfect, think about installing additional checks and balances into your workflow so that you can document that the staff is following the same process each time. Software systems such as iRIScope have been introduced in recent years to help hospitals and surgery centers ensure that each of their flexible endoscopes is reprocessed the proper way each time, and documentation of their reprocessing is kept electronically using advanced RFID technology.