Methods to Measure Productivity in Healthcare

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The Importance of Quality

For patients, quality of care is far more critical than quantitative evaluations. The outputs of services delivered return as inputs when patients leave positive reviews. Such reviews increase a practice’s reputation and can draw in more patients.

Patient Visit Lengths

Since each patient’s time is valuable, you want to respect their time. Often, knowing whether to shorten or lengthen patient visit lengths depends on patient satisfaction. If your patients are frustrated with how long appointments take, shortening them may be necessary. On the other hand, you should consider taking more time with each appointment if patients feel rushed and misunderstood.

The traditional productivity metric with patient visit lengths is to keep them as short as possible so you can see the most patients per day. While brevity still matters, patients appreciate feeling understood and heard rather than rushed and dismissed.

Spending an extra couple of minutes with patients may seem counterintuitive from a productivity standpoint. Yet, it involves making the most of each appointment. Patients will feel that your clinic and staff do the utmost to care for patient health.

Either way, ensure each physician at your medical facility records patient visit lengths. Doing so helps determine whether you should shorten or lengthen appointments to enhance productivity.

Patient Wait Times

For patients, brevity matters most in the waiting room. Still, it’s better to shorten patient wait times through greater administrative efficiency than rushing appointments.

Making checking in and seeing a provider as efficient as possible for patients may be the best option. Focusing on administrative factors lets you shorten wait times without harming patient outcomes. To measure this factor, have staff record check-in times and the beginning of each appointment when the provider sees the patient.

Patient Satisfaction Rates

Patient satisfaction is the ultimate metric for qualitative productivity evaluations. Unless patients provide unprompted feedback, it’s often unclear how satisfied patients are with your services. Clinics without such information interpret data such as patient retention rates, missed appointments and wait times to determine patient satisfaction.

To measure patient satisfaction accurately, ask patients to provide feedback. Such feedback may come in questionnaires, direct interviews or email and text forms. Ask detailed questions about the quality of care patients receive, and leave room for additional comments.

Patient Retention Rates

Patients who are satisfied with your clinic’s services are more likely to return for follow-up appointments. Many factors influence patient retention rates. Some are outside your control, while others, like patient satisfaction, directly relate to the quality of care. Keeping track of patient retention rates through data analytics can give you insight into the quality of care your clinic provides. If you notice low retention rates, review patient feedback to diagnose the issue. Reasons for low retention rates can include long wait times or insufficient care quality.

Improve Productivity With Pathstone

At Pathstone, our healthcare consulting experts can help you improve financial and operational performance in healthcare settings without sacrificing patient outcomes. Contact us today to learn more about how Pathstone can enhance your productivity.

The Importance of Measuring Productivity

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Measuring Productivity

Measuring productivity is vital to optimizing economic outputs in the healthcare industry with low productivity impacting a healthcare facility’s ability to function and support the economy in meaningful ways. Keep reading to learn more about how to improve productivity in your facility.

Healthcare is a main pillar of the U.S. economy, accounting for 19.7% of the national gross domestic product (GDP) in 2020. Nonetheless, healthcare does not always have a significant contribution to national economic growth with many factors playing a role in this discrepancy. Some of these factors include market irregularities, U.S. healthcare infrastructure peculiarities and regulatory requirements. Despite this, one factor a healthcare practice can control is its productivity measures.

The Importance of Measuring Productivity

Measuring productivity allows you to find the areas of your facility that are operating smoothly and efficiently and those that could use improvement. Doing so helps you:

  • Focus on long-term growth rather than short-term productivity gains that may undermine operations.
  • Identify specific opportunities to control healthcare spending growth in ways that support the economy and patient outcomes.
  • Deliver higher quality services while spending less on non-essential expenses.

In short, measuring productivity enables you to increase productivity to achieve positive outcomes. In healthcare settings, positive outcomes may involve continued medical advances, staying on top of service demands and improving affordability for patients.

However, measuring productivity is not as straightforward as it may seem, as the methods you use to measure productivity also matter.

Traditional Measurement Methods

Traditional productivity measuring methods focus on hard metrics like time and financials. These hard metrics emphasize human capital and labor production rather than the services delivered. When seen through these measures, solid productivity in a healthcare setting is a matter of lower costs and quicker services.

Time metrics evaluate such factors as the following
  • The time needed to care for patients and complete each case
  • The number of patients doctors treat per day
  • The time healthcare employees spend with each patient
The financial healthcare productivity metrics look at
  • Employee labor costs: Financial metrics assess positions essential to patient care and those that provide supplemental benefits. Maximizing productivity in this area may involve redistributing wages, culling staff or exploring casual and temporary hires.
  • Amount of overtime pay given: Sometimes overtime hours are necessary, such as when treating a patient in an emergency takes providers past closing hours. Other times, overtime hours are less critical, such as staying after hours to complete paperwork or spending too much time with each patient.
  • Supply and equipment costs: Financial metrics weigh the benefit and expense of each medical device the clinic or hospital uses. State-of-the-art devices may be expensive, but their benefit may provide a worthwhile return on the investment. Conversely, a clinic or hospital may opt for the bare essentials to cut expenses. Other considerations include keeping enough medications on hand to meet patient demand.
  • Other expenses: Electrical, heating, water and other utility bills are necessary to provide adequate patient care. Still, finding ways to cut back on these expenses increases financial productivity.

The traditional methods of measuring healthcare productivity are quantitative rather than qualitative. A clinic may reduce open hours or hire only essential staff to maximize productivity. Doctors may also prioritize brevity when seeing patients, making quick decisions and only pushing for more details when significant concerns arise.

By focusing on time and financials, traditional methods focus on patient volume rather than the patients themselves, their needs and satisfaction with their care. Likewise, by disregarding patient satisfaction, these methods answer only half of the question of productivity. Decreased patient satisfaction can undermine such productivity methods.

Take Action

Measuring productivity is vital to your organization on a high level, get in touch with Pathstone today to start monitoring your overall productivity and explore how we can increase your bottom line.

How to Improve Hospital Efficiency

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Create Your Strategy

Efficiency often goes hand in hand with other goals, like profitability and patient safety. Consider the following strategies if you’re looking to improve hospital efficiency.

Improve Cross-Department Coordination

Many patients, especially those with comorbid or chronic conditions, work with multiple providers. Even within one hospital, patients rely on the coordination of various departments. A visit to the emergency room might involve services from internal medicine, radiology, the lab and the pharmacy. Ensuring these departments are on the same page and collaborating with each other can help reduce the risk of errors and facilitate more efficient information sharing.

Departmental coordination can also support a positive, collaborative workplace culture and minimize the risk of data silos, miscommunications or redundancy. Some ways you might improve coordination include implementing cohesive technology solutions and creating cultural shifts.

Provide Proper Staff Training

A well-trained staff can work more efficiently, with less need to find answers to questions, fix errors or learn new concepts on the fly. Invest in your team and provide appropriate training. Stay on top of industry trends, new technologies and policy changes as they occur in the organization.

Make Patient Safety Your Top Priority

Putting patient safety first is a worthwhile goal on its own, but it can also increase hospital efficiency. Consider the time and costs associated with errors and delays. If you can avoid a misdiagnosis, you might also avoid the additional work it takes to address complications, legal issues or reputational damage. The additional diagnostic and treatment costs of poor patient safety can greatly impact efficiency and slow down your operations, further reducing profitability.

Look for initiatives that help you be proactive about safety. For example, using decision support systems or cracking down on administrative fraud can help you avoid problems altogether and eliminate the additional resources required to address them.

Contact Pathstone Partners for Healthcare Consulting

It’s no revelation that healthcare organizations are complex. With advanced technology demands, strict regulations, evolving patient needs, vendor complexity and labor challenges, there’s a lot to cover. Pathstone Partners puts experienced consultants on your side. With a focus on non-labor cost reduction, we’re dedicated to improving hospital profitability and efficiency across the board.

We start by identifying areas for opportunity in all non-labor spend categories. Then, we work as an extension of your team to implement and sustain savings initiatives, complete with training and talent development. As an industry leader, we know the value of a long-term partner you can trust for successful implementation and ongoing support.

Reach out to us today to see why over 175 hospitals across the United States have turned to Pathstone Partners for organizational transformation.

Six Ways to Increase Hospital Profitability

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Healthcare is an ever-evolving industry

To serve patients and meet business goals, hospitals must adapt to a new landscape, with different technologies, regulations and reimbursement models always appearing. Maximizing profitability and efficiency are two goals that often pose a challenge, as healthcare providers work to balance costs with effective, timely care and innovative services.

Since hospitals can be particularly complex healthcare systems, reaching these goals requires efforts across many parts of the business. Let’s explore some ways to increase profit in hospitals and healthcare systems and boost efficiency.

Understand Revenue Cycle Performance

If you want to find opportunities and areas for improvement, you’ll need to know your revenue cycle on a deeper level. Better data can also help executive team members quickly make informed decisions.

To dive into your revenue cycle, consider implementing revenue cycle analytics. These solutions can turn the raw data into visualizations like graphs and charts and display them in an easy-to-understand dashboard. You can also improve the quality of the data that enters your analytics solution with better reporting tools.

Invest in Healthcare IT Systems

Technology has seen huge advancements in recent years, so if you’re still running on outdated legacy technology, you’re likely missing out on significant profits. Some examples of cost-saving IT initiatives include decision support systems, electronic medical records (EMRs) and computerized physician order entry systems for prescriptions.

These digital technologies could offer significant benefits to hospital profitability. Annual savings from efficiency benefits alone could exceed $77 billion. By improving scheduling and coordination, for instance, a hospital could reduce hospital stays, increase productivity, and nurse administration time.

The safety benefits of healthcare IT can also boost your bottom line. A medication order system could alert physicians to potential drug reactions, helping eliminate adverse events overall. Healthcare IT technology can provide innumerable benefits for disease prevention and chronic disease management, which are becoming especially relevant in value-based care initiatives.

Reduce Readmission Rates

Readmissions are costly for the patient and the practice, and many of them are preventable. By collecting and analyzing data across the continuum of care, such as follow-up care, hospitals can focus on reducing readmission rates. Lower rates can help achieve maximum reimbursements and avoid penalizations from the Centers for Medicare and Medicaid Services (CMS).

Properly Negotiate Vendor Agreements

The vendors you work with have extensive training and resources to devote to contract negotiation, ensuring that their company has the upper hand. Hospitals typically don’t have the same kind of resources, which can put you at a disadvantage. Spend some time on training to ensure that anyone making these agreements knows the basics of successful negotiation.

You may also want to consider working with a healthcare consultant. At Pathstone Partners, we come to negotiations prepared to make hospital profit improvements. We might collect data on supplier relationships, out-of-line pricing benchmarks, hospital growth and reimbursement rates to gain the most leverage before meeting with a vendor.

Perform Line-Item Analyses

Your line-item analysis is a key part of understanding your monthly spending. Many hospitals are overpaying. A line-item analysis can provide additional security by confirming that all listed items and invoice pricing are included in the vendor contract and that hourly rates are consistent. Manual analysis is virtually impossible, even for smaller hospitals. Automated line-item analysis is another area where IT investments can help significantly.

Consider a Telehealth Strategy

Telehealth has seen a 38-fold increase from pre-pandemic numbers. Offering these digital service options can open up new revenue streams and expand your reach within a community. Telehealth is especially valuable in rural settings or in areas facing provider shortages, where it can make healthcare possible for people who would otherwise struggle to get to a doctor. Telehealth is also an excellent tool for managing chronic conditions and improving patient relationships.

The Impact of Data Analytics in Healthcare

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Collecting and Organize Data

There is a wealth of information available that healthcare organizations can leverage to streamline efficiency and revolutionize patient care — thanks to an abundance of raw data. The key is to collect and organize this data into an easy-to-interpret format and leverage it to improve current processes and procedures.

In particular, studying healthcare data analytics helps facilities identify where they can cut costs to improve their bottom lines. Keep reading to learn more about the positive financial impact of implementing and studying data analytics in your healthcare organization.

What Is Data Analytics in Healthcare?

Data analytics in healthcare is the act of compiling, categorizing and interpreting previously disorganized data to learn from and use it to optimize a healthcare organization’s operations and services. In short, it’s studying data-derived insights to improve operational efficiency and patient care. The most notable uses of data analytics in healthcare include:

  • Forecasting real-time trends.
  • Automating processes and procedures.
  • Making data accessible and easier to understand.
  • Revolutionizing patient care.
  • Driving healthcare innovation.
  • Advancing medical research.

Studying data-derived intelligence is helpful for every aspect of running a patient-centered, profitable healthcare facility. For example, healthcare practitioners can use data to spot trends that could cause re-admissions or assist in disease prevention. Plus, analyzing data could surge a facility’s bottom line by streamlining its operational efforts, like anticipating supply or staffing needs.

The Different Types of Healthcare Data Analytics

To study data, healthcare organizations first need special software to collect it and systems to compile it into easy-to-digest information. It’s also helpful to understand the different kinds of data analytics. Depending on an organization’s goals or pain points, one type of data analytics might be more beneficial to gather and study than another.

There are four main types of healthcare data analytics organizations can leverage:
  • Descriptive: Descriptive analytics is historical data that organizations can analyze to decipher whether their current systems and practices are efficient.
  • Predictive: Predictive analytics uses forecasting techniques like predictive modeling to make educated guesses about what might happen.
  • Diagnostic: Diagnostic analytics aims to diagnose what happened and why — or the factors contributing to particular outcomes —  using historical data.
  • Prescriptive: Prescriptive analytics leverages machine learning and historical data to make predictions helpful for introducing optimal practices.
Ways Data Analytics Can Reduce Healthcare Costs

There are several ways utilizing data analytics improves patient care and boosts an organization’s bottom line. Keep reading to learn how data analytics reduces healthcare costs.

Accessible Medical Records

Going paperless with digital medical records or Electronic Healthcare Records (EHR) boasts significant cost savings for healthcare facilities. EHRs are also superb for collecting real-time clinical, administrative and diagnostic information healthcare professionals can use to anticipate a patient’s needs and further personalize their care.

For example, EHRs can prompt practitioners and administrative staff to schedule reminders and medication orders or note patient preferences and trigger warnings, thus improving the patient experience. Plus, an EHR helps streamline time-consuming clerical tasks, like data access and entry. It has the potential to reduce errors and make information accessible from multiple facilities.

Smooth, Efficient Supply Chains

Supply chain breakdowns result in lost time and revenue, but they also affect patient care. Organizations can use data analytics to assess and anticipate their supply needs. Doing so optimizes inventory management for a smoother and better patient experience.

For example, data analytics highlights trends like shipment delays and order-to-delivery time frames. Analyzing supply chain disruptions or issues reduces the likelihood of overspending and streamlines inventory management, resulting in smarter spending and prompt care.

Enhanced Security

Unfortunately, data breaches and fraud claims are all too common in healthcare. Cybercriminals are known to target healthcare organizations for sensitive information. Cyberattacks were especially prevalent during the COVID-19 pandemic when healthcare professionals felt overwhelmed and burnt out.

The effects of data breaches are exceptionally costly for hospitals and other healthcare practices. To tackle cyberattacks and data breaches head-on, healthcare facilities can study data analytics to analyze the status quo and identify unexpected changes. For example, pinpointing suspicious events like surges in network traffic might indicate fraudulent activity.

Staffing Needs

An understaffed healthcare facility affects professionals and their patients. Thus, it’s crucial that an organization can anticipate staffing needs — especially during seasons when staffing might naturally fluctuate, like the holidays or flu season.

However, it’s tricky to distinguish between overstaffing and understaffing. Overstaffing leads to overspending and understaffing negatively impacts patient care. Studying historical staffing data and seeing how the seasons and other commonplace events affect it helps organizations hire and schedule the appropriate number of staff members during times of critical need.

Learn to Use Healthcare Data Analytics to Improve Your Facility

Are you ready to use healthcare data analytics to improve your organization but don’t know where to begin? Consult our experts at Pathstone Partners! We’re a leading healthcare management consulting firm that collaborates with healthcare facilities to improve their financial and operational efficiency.

It’s our ultimate mission to empower practitioners to provide the best patient experience possible. Contact us today to learn more about how data analytics can transform the way you run your healthcare organization and provide patient care.

Cost Reduction Initiatives For Healthcare Organizations

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Cost Reduction Initiatives

Cutting costs can be tricky, especially when patient health is on the line. Targeting spending less in larger areas like staff, supplies and equipment seems simple. However, these are essential to keeping the hospital running efficiently and delivering a positive patient experience.

Instead, consider the following initiatives as alternative ways to create a successful cost-reduction strategy.

Optimize Revenue Cycle

A healthcare revenue cycle helps organizations stay financially healthy as they provide services for treating patients. Some factors can enhance the revenue cycle and help avoid debt collection. These include:

  • Patient education: Patients should continually be educated on the costs of care, especially early in the treatment. Financially clearing patients early and consistently can help them be prepared and not confused when bills arrive in the mail.
  • Electronic medical billing: Provide online payment opportunities for patients to conveniently and quickly pay their bills.
  • Data analytics: As we mentioned before, data analytics are important in maintaining costs. With this concept, you can get a clearer picture by analyzing your revenue cycle trends.
  • Process updates: Continue to revisit your daily operations to ensure all pieces work smoothly. You can address any issues at the root and adjust strategies where needed to avoid large costs or debt for later maintenance.
Improve Supply Chain

The post-COVID supply chain has greatly improved through enhanced communication opportunities between the medical staff and management. Doctors relaying helpful information on certain products and treatments to management can improve the inventory of adequate medical supplies.

Additionally, regularly evaluate your suppliers. Are they providing quality products at a reasonable price? From here, identify what goods are being transported along the supply chain, including how much of the product is being delivered vs. how much you use between shipments. Knowing what and how much you use can help avoid wasting equipment.

Optimize Information and Digital Technology

Technology continues to advance, and healthcare organizations are beginning to use that to their advantage. Hospitals can utilize technology to create efficiency and cut costs by doing the following:

  • Automate administrative tasks: Doctors spending hours on monotonous administrative tasks can take up more than just time. Technology can make these tasks more cost-effective by automatically importing test results into a patient file, scheduling appointments and providing prescription information to patients.
  • Improve workflow and operations: Technology automation can reduce the risk of human error, saving the hospital from negligence claims. Implementing telehealth can also improve a clinician’s productivity through e-prescription refills and e-visits, allowing the clinician to see more patients.
  • Rethink human resource expenses: Digital applications can analyze labor demands, identify open beds and check equipment status to allow clinicians to focus on patient outcomes.
  • Process digital claims: An automated digital claim processor can assist patients with billing, improving turnaround time and reducing fraudulent claims.
Optimize Labor and Streamline Management Structures

Labor expenses are expensive for hospitals, so discovering where to cut costs in this realm could be very beneficial. You can start by looking over your current medical staffing schedule and administrative positions.

In short, it is about optimizing the right labor in the right departments. Every unit should have a list of necessary tasks and noticeable credentials that need to be fulfilled in each. For example, if nurses are responsible for food delivery in a particular unit, consider hiring a less expensive food tech to pass out trays. Doing so can reduce five nurses to four by eliminating a task from their list that can be handled by another employee.

You can also recognize trends in your organization and adjust the staff. Are there seasons or certain circumstances where patient counts are likely to increase? This process may take some time in the beginning, but it could save you quite a bit of money in the end.

Additionally, for every doctor, there are 16 healthcare workers — and only six are involved in patient care. The other 10 are administrative roles.

Now, these labor and management structures can be simplified. Technology can help streamline a patient’s care and reduce administrative costs but sometimes only leads to workload reduction. Technology in healthcare should streamline these processes instead of creating additional work.

Each administrative position should have a specific role that works for the good of the whole. Let the mundane tasks be taken over by technology, such as scheduling appointments, billing patients, managing patient communications and collecting payments.

Improve Patient Throughput

Now, take a look at your patient flow. Are things moving efficiently? Identifying ways your patient flow can improve is another area of strategic cost reduction.

Consider the following to improve your patient throughput:

  • Enhance collaboration between caregivers across units.
  • Improve communication between a caregiver and patient.
  • Continuously monitor the patient and make good notes.
  • Allow caregivers to spend more time with patients.

Every patient should be seen with the same careful attention in a timely manner. Doing so will improve the patient experience and decrease bottlenecks, reducing delays and ensuring the maximum occupancy for each hospital bed.

Optimize Utilization

Utilization in healthcare defines the usage of products or services within a certain hospital. This is another area where data analytics can be beneficial, as they can accurately assess current operations. Understanding what your hospital uses can help you avoid overtreatment and lower costs while increasing trust.

You can also optimize utilization by encouraging employee feedback. For example, when looking at the data, get a second opinion from employees before deciding what areas are unnecessary. A well-planned feedback system maintains consistent data to take action with, even when you aren’t in a crunch. This system can help your organization stay on top of cutting overall costs.

Introduce a Hospital Asset Management Plan

Hospitals spend a lot on fixed assets, including physical infrastructures like heating, air conditioning, ventilation, plumbing and generators. These assets also include healthcare-specific items like wheelchairs and beds. Instead of reducing the use of these needed items, aim to protect them through a hospital asset management plan.

A hospital asset management plan can help maintain a safe and clean environment in the most cost-effective way possible. Some ways to do this are by tracking your hospital’s most critical equipment, ensuring safety requirements are met and supporting a preventive maintenance approach.

Get the Results You Deserve With Pathstone Partners

At Pathstone Partners, we are committed to providing your company with the right plan to reduce costs. Our healthcare consultants can help you identify, implement and sustain a cost-reduction plan that fits your organization’s exact needs. Contact us today to get started.

Cost Reduction Strategies for Healthcare Providers

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Cost Challenges Facing Healthcare Organizations

Hospitals used to be reimbursed at a line-item level, where a charge was only issued with each item used or service provided. That bill was then sent to the patient or insurer, incentivizing procedures and tests.

Now, hospitals are given a certain amount for each diagnosis-related group (DRG). The hospital must then figure out how to best spend that fee while keeping the patient’s overall health status as the priority. Below are three of the most significant risks involved with delaying these strategies.

Lack of Resources or Bandwidth for Strategy Management

When we think of healthcare resources, we paint a picture of physical supplies like gloves, medications or medical kits. As you can imagine, a lack of these resources for healthcare settings can affect the quality of patient care and the work environment for providers. For these reasons, increasing the supply of resources is one of the first places organizations invest extra funds, delaying any plan or initiative.

However, consider extending the needed resources for hospitals to include general knowledge about strategic management — or bandwidth. For the success of cost-reducing plans, teams must have the capacity, energy and motivation to deal with the situation. Understanding your goals and knowing how to implement a strategy can help your organization manage cost reduction.

Decision-Making Process Complexity and Length

Making the final decisions for these strategies can be lengthy and full of multiple levels. Because of this complex process, implementing strategies can be seen as more of a hassle than a help. People and organizations have often pushed a cost-reduction strategy to the wayside because of the many factors involved, including maintaining employee and patient safety.

However, don’t let the lengthy process scare you away from making necessary changes for the betterment of your healthcare organization. Taking the required steps can change this daunting task into a helpful resource to utilize for years to come.

Poor or Inadequate Data for Initiative Support

Data analytics in healthcare are important for categorizing data to use it toward the organization’s operations and services. Poor data organization can add to your costs.

Insufficient data can interfere with patient medical records, increasing potential errors and hindering the patient experience. It may even impact your organization’s security, and data breaches are exceptionally costly.

Take control of your data to best help with the decision-making process. This way, you can pinpoint precisely where cost reductions are needed based on recent data, making initiative support much more efficient.

Take Action

Any organization has several challenges that threaten the success of reducing costs. Overcoming these challenges is vital to ensure we create an environment for patients to heal and thrive. What healthcare organizations decide to implement now can create a sustainable model for the future.

Contact Pathstone Partners today and discover how we can help your margins!

How Supply Chain Management Can Reduce Hospital Costs

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SCM & Hospitals

Supply chain leaders within healthcare are under immense pressure to reduce cost across their systems. In the US alone, hospitals are estimated to lose $54 billion in net income in 2021.

Robust utilization data is one way that healthcare supply chain leaders can increase their bottom line and improve the revenue management cycle. Dynamic access to “centralized, consumable, and real-time data allow health systems to determine what’s needed, what’s in stock, and the scope of future demand.” Hospital supply chain systems employ data across their system to capture demand, eliminate waste, and avoid redundancy.

Eliminating waste and redundancy across the medical supply chain is just one example. Supply chain knowledge and data can be employed across a health system to achieve price reductions, utilization optimization, and standardization that drive value to the health system.

Does the Healthcare Supply Chain Affect Patient Outcomes?

In today’s value-based care model, health system leaders are required to improve patient outcomes despite the necessity to reduce cost. In particular, supply chain management in the healthcare industry plays a critical role in improving patient outcomes to achieve reimbursement through incentive alignment.

For example, decisions surrounding supply selection solicit feedback from the hospital supply chain teams and clinicians to optimize patient outcomes and source cost-effective supplies. These teams can be aligned through detailed data. Utilization and clinical outcomes data provide the opportunity for medical supply chain teams and clinicians to make decisions that achieve the goals of the health system. Linking supply chain related items such as product standardization to patient outcomes enable these teams to align on the most cost-effective and clinically optimal choice.

What is the Future of the Healthcare Supply Chain?

Supply chain management is a critical function in the healthcare industry. The elimination of unnecessary costs, patient outcome improvement, and increased reimbursement are only a few of the significant benefits optimal supply chain management provides. Emphasis on data collection and employment, incentive alignment, and vendor management are a few avenues that healthcare organizations can utilize to achieve these goals in the future.

At Pathstone Partners, we specialize in helping healthcare systems across several different markets navigate the complexities of their supply chain. With our years of experience in clinical purchased service and supplies, we can assist with everything from supplier contract review to price negotiations.

Contact us online to learn more about our healthcare consulting solutions and how we can help create efficiency in your supply chain.

Ways to Optimize Healthcare Supply Chains in Healthcare

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Optimizing the Healthcare Supply Chain

Optimizing the healthcare supply chain is crucial to ensuring patients receive high-quality care. While the healthcare supply chain has strict regulatory requirements, there are areas where it can improve. Enhance efficiency in the supply chain by following these hospital SCM tips:

Improve Visibility

You should be able to tell where products are within your supply chain at any given time and properly manage inventory. To do this, gather your data in a single location. This process includes data from manufacturing sites, distributors, suppliers, products, modes, customers and the like.

You will then need to improve your data analysis capabilities from end to end using software platforms, artificial intelligence (AI) or third- or fourth-party services.

Consolidate Your Supplier Base

Managing your suppliers is an easy way to optimize your healthcare supply chain. Consolidating suppliers can be simple if you:

Build partnerships with your suppliers that are a win-win for all parties.
Start retendering to improve your understanding of the market, improve supplier competitiveness and potentially build open contracts.
Conduct performance reviews on a monthly, quarterly and annual basis.

Center Performance

Define a hierarchy of meaningful outcome-based healthcare supply chain measures. These performance measurements should allow for analysis of the tradeoffs between key performance indicators (KPIs).

You can also create a KPI model focusing on the quality, service, costs and revenue of your entire supply chain. Target each part of the organization’s supply chain and capture real-time performance data.

Implement Standardization

Healthcare organizations often grow by acquiring other entities. This situation can result in all the separate systems and processes affecting one another.

Standardize processes for physical and financial elements using a framework like the Supply Chain Operations Reference (SCOR) model. Doing so allows you to implement and enforce standards across all areas of the medical supply chain.

Know Your Costs

Many organizations would benefit from a greater understanding of their costs, including how much these are and where they come from. Start by collecting data about your costs of goods and services. Using standard categories, you can benchmark and assess the data and look for patterns.

Analyzing the invoice will help you determine where your cost-saving opportunities are. You can identify non-standard patterns and implement new processes that eliminate waste.

The Value of Supply Chain Management in Healthcare

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What is Healthcare Supply Chain Management?

Healthcare supply chain management involves the procurement of resources, the management of supplies, and an interlinked group of processes that are required for healthcare professionals to carry out their operations and increase productivity. Each link in the medical supply chain influences overall cost, patient outcomes, and service efficiency.

The Importance of Supply Chain Management in the Healthcare Industry

COVID-19 related supply chain disruptions across the United States have expedited the need to optimize hospital supply chain management. This is especially true for health systems that aim to provide high-quality care, ensure service availability, reduce cost and boost profitability. Over the course of the past few years, supply chain management in healthcare has become a central focus due to increasing pressures to reduce cost from the pandemic, while improving patient outcomes and reimbursement. Healthcare supply management and optimization within health systems achieve these goals through improved data collection and employment, attentive vendor management, and incentive alignment.

How Does the Healthcare Supply Chain Work?

The healthcare supply chain for healthcare consists of numerous stakeholders. Each one plays a significant role in how the supply chain operates. These stakeholders include:

  • Manufacturers: The manufacturers are the labs, biologists and vaccinologists. They perform the research, development, manufacturing and monitoring. These groups make medical, surgical and pharmaceutical supplies and watch for shortages.
  • Distributors: The logistic partners and wholesale distributors sell, deliver and monitor products while following proper procedures.
  • Providers: Providers include pharmacies, urgent care centers, hospitals, assisted living facilities, dialysis centers and long-term care facilities. These places receive products from the distributors so they can prescribe them to patients. They submit orders to distributors, look for inventory shortages and call in prescription refills.
  • Patients: The patients are the people in the community who use these products or services. They influence the demand for medicines and other products with their unique needs.

Contact Pathstone to discover the critical role of healthcare supply chain management in ensuring the seamless flow of resources and services within the healthcare industry.