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