Enhanced Supply Chain Management
By Jayme White, Director, Technology Sales, McKesson
Supply chain management and technology solutions in Healthcare continue to be critical to the financial health for providers. Focus will remain on reducing operating costs, driving standardization, increasing control with oversight, tracking spend analysis while leveraging automation to eliminate manual inefficiencies that unnecessarily inflate the bottom half of their balance sheets. Understanding these key goals and objectives during the selling process is vital. Healthcare providers expect you to understand their business, pain points, workflows and goals. Being able to share your understanding of walking in their shoes drives creditability and your expertise to be a strong partner.
Four Ways Technology Can Improve Healthcare Supply Management
Automating aspects of the supply chain with technology solutions can make the entire medical supply inventory process more effective and efficient for providers seeking to save costs in the new value-based care world. Being able to articulate these workflows and offer solutions that will benefit the customer will help change the conversation to a more consultative approach. Expanding the discussion from procurement through the payment process provides a complete offering that will drive results from the point of ordering to the accounting services.
• Automate Medical Supply Assessment
The first step is assessment. That knows what is on the shelves and what is needed to care for patients. For most, that process is manual and unorganized. It is a nurse walking around with a pad and pencil writing things down as a list. It is a doctor using the last pair of latex gloves and putting the empty box on the front desk. It is not knowing what is needed, how many are needed and where to get what is needed. Medical supply management technologies like barcoding and scanners can automate each of those three decisions for a practice. They know what items are needed. They know how much of each item should be on hand at any one point in time. And they know where a practice can get the items when it needs them and in the amount needed. Not only does that take time out of the supply chain process, it improves accuracy and reduces errors like buying too much of one thing and not enough of another. That also has a direct impact on quality and safety of patient care.
“Automating aspects of the supply chain with technology solutions can make the entire medical supply inventory process more effective and efficient”
• Consolidate Medical Supply Procurement
The second step is procurement. Rather than calling multiple vendors or logging on to different websites, technology automates and streamlines this function. This can be accomplished with a single portal for medical-surgical supplies, lab supplies, and office supplies. There always will be a one-off item that must be handled outside of the single portal, but that should be the exception. There are other benefits to a practice switching to an automated, single-portal approach. This includes product standardization from buying the same item in bulk from one source, which can reduce the per item cost of the item. That approach also can reduce packaging, shipping, and delivery costs. Additionally, by using an automated single-portal for medical supply ordering, a practice can manage the procurement to payment process more effectively, including setting approval and budget rules for all purchases. For example, the system can send alerts and stop orders for supplies exceeding a specified dollar limit or supplies that fall outside of a pre-approved product formulary.
• Manage Medical Supply Receiving Online
The third step is receiving. That is making sure a practice received the right supplies, the right amount at the right price. Typically, this is done manually by checking the packaging slip against everything that is in the box when it is found at the front desk or back door. Rather this should be automated through technology similar to receiving notifications and confirmations via e-mail or text messages for consumer retail purchases from an online shopping platform. This provides an electronic record of the transaction that can forwarded with the click of a button rather than folding it up, putting it in an envelope and dropping it in the mail. The practice is leveraging technology to share that information with others who need it rather than picking up the phone and trying to reach multiple people.
• Reconcile Medical Supply Order Electronically
The fourth step is payment reconciliation. Typically, the person doing the ordering is not the same person doing the paying. Invoices should be sent electronically to the accounting department, which reconciles the purchase order, the shipping receipt and the invoice to ensure a practice is paying the right price for exactly what it ordered. The net result is accurate and quick payment for medical supplies. That approach also creates an electronic audit trail.
The technologies that automate all four steps—assessment, procurement, receiving, and reconciliation—also should provide practices with other capabilities. Since the technologies should be accessible by mobile devices (e.g. handheld scanners, tablets and smartphones), that makes the supply chain management process more efficient by enabling practices to make purchasing decisions and track orders from any location when it is most convenient. The technologies should also be able to generate standard and customized financial reports based on data collected at each point in the process. The reports should track and analyze spending to flag problem areas or opportunities for savings.
Evaluating the Technology Needs
How much technology a practice needs to automate its medical supply management process generally should be based on supply volume. Small practices with five purchase orders a week, for example, should be fine with a small solution for a monthly subscription fee. Large practices with hundreds of purchase orders a week, though, likely would need a larger solution that would require a significant capital outlay. Functionality, features, and applications should match the purchase volume.
Regardless, the return on investment will be there. It will be there from making the supply chain process more efficient and effective. And it will be there from reducing the time clinicians spend on managing their medical supplies and increasing the time they spend on patient care.