Home' The Source : Fourth Quarter 2010 Contents and they're significant. Four hundred billion dollars
[the amount of Medicare cuts] is a huge number, so
supply managers will need to cut costs and find ways
to make up for lost revenue."
But just as costs must be cut, there will also be an
increased need for certain types of supplies, such
as those for chronic illnesses, says John Hoyt, ex-
ecutive vice president of organizational services at
HIMSS Analytics, a leading provider of health-care
data and research.
"Health-care reform clearly will bring more
patients to primary care and urgent care centers than
they would have seen before because many people
[who will be covered under the new law] either did
not purchase health care before, or they waited until
they were so sick that they just went to the emergency
room," Hoyt says.
"These people have been getting health care, but
just put it o longer," Hoyt adds. "So the e ect will
be a bump in demand and specifically, a bump in
supplies to manage chronic care illnesses such as
diabetes, influenza and congestive heart failure. So
supply chain managers need to look at the demand
shift and expect to have larger purchasing volume for
chronic care illness supplies."
How to Navigate
As supply chain executives continue to watch the
news and wait for new regulations to be finalized,
they can begin making some changes that will help
lead their facilities into the evolving future.
The first step is to focus on standardization. Every
process and every supply order should become stan-
dardized to eliminate redundancy and waste. The
conversion to EHR is a big step in this process, as
that conversion is largely focused on the use of the
government's standards of meaningful use, which
were released in July. Once a hospital is converted
to electronic records, it will be able to monitor each
health-care worker's activities, including a phy-
sician's interaction with patients and reaction to
various symptoms, and hold them accountable for
whether they follow the standards set in place, says
Bill Laker, chief information o cer for Sisters of
St. Francis Health Services.
"Establishing standards across all processes will
help eliminate variation and improve e ciency and
outcomes," Laker says. "By standardizing the products
that are ordered and stocked, we'll reduce the number
of types of supplies ordered and help cut costs."
To become standardized, "every interaction with
a patient will have to be scrutinized," Reiser says.
"Supply chain managers will have to look at every
instance to find ways to make it less expensive. For
instance, when a patient comes into the hospital,
he is given lots of information. That information
doesn't need to be given to him again during his
stay. Currently, there's a lot of redundancy, and
we need to make every interaction more e cient
In addition to establishing standards across the
purchasing and patient interaction processes, sup-
ply chain executives must also pass along part of the
responsibility for cost-cutting to their vendors.
"Get your vendors and partners in early and put
pressure on them to come up with solutions for cut-
ting costs," Reiser says. "And don't feel bad about it,
because those who do come up with solutions will
have great opportunities to work with you. The chal-
lenge is leveraging the power you have in the market,
which is substantial, to force vendors to work with
you to come up with ways to cut costs."
Finally, supply chain executives shouldn't overlook
the value of group purchasing organizations (GPO)
like HealthTrust in helping them to meet the goals set
out by health-care reform. Working with HealthTrust
can help supply chain managers streamline the stan-
dardization process and learn from other facilities,
rather than reinvent the wheel.
"The current system is not great about taking
what works in one part of the country and sharing it
with [facilities in] other parts of the country," Reiser
says. "We're going to have to change that. A GPO
already has the network in place to e ectively find out
who's succeeding and who's failing, what methods
they are using, and share that information across
their membership." S
"Establishing standards across
all processes will help eliminate
variation and improve e ciency
and outcomes. By standardizing the
products that are ordered and stocked,
we'll reduce the number and types of
supplies ordered and help cut costs."
Bill Laker, chief information o cer, Sisters of St. Francis Health Services
28 Fourth Quarter 2010 | The Source
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