CV Directions Vol. 1, No. 2 - Page 9

Solving the "Blind Spot" in Hospitals H ospitals throughout the United States and around the world experience similar and costly challenges when it comes to managing their clinical devices and supplies. Product waste is endemic to the entire healthcare system, and it is costing hospitals and medical products manufacturers – and ultimately patients – billions of dollars every year. Costly implantable devices are expiring on the shelves, never used, and most hospitals are only tracking “perpetual” commodity supplies or documenting select implants. The reality on the ground is that a huge portion of clinical products are never tracked or accounted for whatsoever – a victim of failed inventory management and the cause of failed clinical supply documentation. At VUEMED, we call this the ‘blind spot,” and it’s one of the major contributors to our skyrocketing healthcare costs. 2. The clinical documentation system fails to capture lot/serial number and expiration date information. For select implants a product sticker might be placed on a patient chart, but this is certainly not the case for other supplies. Not only does this failure contribute to inefficiency in the documentation process, but it also prevents hospitals from tracking specific recalled items to specific patients. A few years ago VUEMED conducted a 15-month case study of a 4-procedure room Cath Lab in the Northeast that was experiencing typical inventory management problems illustrative of this blind spot. First, VUEMED found that the total amount of inventory added over the course of a year far exceeded the amount of inventory consumed for patient care: out of $10,406,046 worth of products purchased, only $7,741,857 worth was accounted for (either consumed, transferred/lent to another department or hospital, or returned to the vendor). In other words, there was $2,664,000 worth of inventory sitting on the shelves; although much of this inventory was there out of necessity, it also shows a considerable amount of excess stocking of products, rather than purchasing based on need or actual consumption trends. Out of this amount was $690,566 of completely unused inventory – 62 percent of which consisted of stents alone, stagnating on the shelves. Of the unused inventory, 54 percent were hospital-owned and 46 percent were on consignment, many of which were about to expire. The lack of accurate consumption data leads to never-used products that unnecessarily bloat departments’ inventories, tying up precious funds. Expired products represent the extreme, but unfortunately common, end result of overstocking and poor inventory management. And both hospitals and manufacturers are hit hard financially by the glut of expired or expiring products in so many departments’ stock. (Expiring products typically represents 5% to 10% of inventory value on a monthly basis which, if not dealt with proactively, can result in hundreds of thousands of dollars in waste each year.) The main cause behind the mismanagement of products by so many Cath Labs and other specialty procedure areas like IR, EP, OR and GI departments is simply that most don’t manage their inventory using par levels aligned with actual consumption needs, largely due to the lack of technology systems to provide such data and help optimize the inventory. Rather, “inventory management” consists of reordering what was used the day before and/or eyeballing what’s “low” in the inventory. This approach inevitably results in inventory surplus, unnecessary product variety, exaggerated SKU quantities, an inventory composition that is misaligned with physicians’ preferences, and reordering based on guesswork rather than data – in other words, serious problems for the supply chain. In addition, clinical supply documentation at the point of care is often inaccurate and incomplete as a result of several issues, such as: 1. Inventory tables in clinical documentation systems are difficult and cumbersome to maintain, requiring continuous manual support. For example, items used may not be found in the system, thereby necessitating manual entry, a process which is not only error-prone but, in fact, may not happen at all due to the hectic clinical environment. 3. Supply information often has to be documented in different systems by different clinical staff for different purposes, including clinical, billing, inventory, and so on. These diverse systems may not “speak the same language,” which often requires clinical staff to manually key in this information several times. Waste and loss of revenue, however, are not the only concerns created by the bli