Keeping costs down and revenue up

Mike Hilditch, managing director of auctioneers, Hilditch Group, which has extensive experience in selling equipment on behalf of the NHS, advises, via a seven-step guide, on some of the key elements for estates and facilities teams to consider to ensure that site clearances both go to plan and reap maximum financial reward, including safeguarding potentially valuable 'kit' against opportunist thieves, and preventing confidential paperwork falling into the wrong hands.

Achieving strategic cost reduction in the OR

Hospitals should be proactive insearching for ways to control operating room supply chain costs. A hospital can identify an overall supply cost savings goal by analyzing patient-encounter data for its 15 most costly procedures and identifying the dollar figure under which 25 percent of cases fall for each procedure. After establishing savings targets, the hospital can achieve its goals through a range of approaches.

Tying supply chain costs to patient care

In September 2014, the FDA will establish a unique device identification (UDI) system to aid hospitals in better tracking and managing medical devices and analyzing their effectiveness. When these identifiers become part of patient medical records, the UDI system will provide a much-needed link between supply cost and patient outcomes. Hospitals should invest in technology and processes that can enable them to trace supply usage patterns directly to patients and analyze how these usage patterns affect cost and quality.

Strategies for achieving orthopedic service line success

Healthcare finance leaders can work with orthopedic surgeons to support better outcomes, clinically and financially, by: Establishing innovative partnerships among hospital leaders, orthopedic surgeons, and implant vendors. Developing and enforcing expectations around contracting and vendor behavior. Establishing a forum for open communication. Building a bundled payment structure. Finding ways to differentiate from the competition.

Ensuring effective device management

In an article that first appeared in the August 2013 issue of HEJ's sister magazine, The Clinical Services Journal, John Sandham IEng MIET MIHEEM, discusses the need to put in place effective healthcare technology management policies, and highlights some of the barriers, including lack of management expertise, and insufficient commitment, that are making achieving this goal more difficult and, in the process, may be contributing to hospitals and other healthcare facilities being unable to comply with regulatory standards in this important area.

Using business intelligence to manage supply costs

Business intelligence tools can help materials managers and managers in the operating room and procedural areas track purchasing costs more precisely and determine the root causes of cost increases. Data can be shared with physicians to increase their awareness of the cost of physician preference items. Proper use of business intelligence goes beyond price benchmarking to manage price performance over time.

Supply chain management with cost-containment & financial-sustainability in a tertiary care hospital

Financial crunch in the present recession results in the non-availability of the right materials at the right time in large hospitals. However due to insufficient impetus towards systems development, situation remains dismal even when funds are galore. Cost incurred on materials account for approximately one-third of the total recurring expenditures in hospitals. Systems development for effective and efficient materials management is thus tantamount to cost-containment and sustainability. This scientific paper describes an innovative model, Hospital Revolving Fund (HRF), developed at a tertiary care research institute in Asia. The main idea behind inception of HRF was to ensure availability of all supplies in the hospital so that the quality of healthcare delivery was not affected. The model was conceptualized in the background of non-availability of consumables in the hospital leading to patient as well as staff dissatisfaction. Hospital supplies have been divided into two parts, approximately 3250 unit items and 1750 miscellaneous items. This division is based on cost, relative-utility and case-specific utilization. 0.1 Million USD, separated from non-planned budget, was initially used as seed money in 1998. HRF procures supplies from reputed firms on concessional rates (8-25%) and make them available to patients at much lesser rates vis-à-vis market rates, levying minimal maintenance charges. In 2009-10, total annual purchases of 14 Million USD were made. The balance sheet reflected 1.4 Million USD as fixed deposit investment. The minimal maintenance charges levied on the patients along with the interest income were sufficient to pay for all recurring expenses related to HRF. Even after these expenses, HRF boosted of 0.2 Million USD as cash-in-hand in financial year 2009-10. In-depth analysis of 'balance sheet' and 'Income and Expenditure' statement of the fund for last five financial years affirms that HRF is a self-sustainable and viable supply chain mechanism to ensure availability of the right materials at the right time at a reasonable cost. Thus innovations like HRF will prove robust in rendering quality healthcare at an affordable cost.

Radiology equipment maintenance and contract procurement in the UK

Radiology equipment maintenance has a similar financial value to new device acquisition over the lifetime of the device. Comprehensive style contracts are dominant largely due to their ease of use and the potential to control budgetary costs, but costs are high. Creative procurement solutions can offer better value. The corrective portion of comprehensive contracts is estimated to be between 50% (Mobile C-Arm) to 92% (CT), which equates to $29.4 million; 80% of the total contract costs within the research population of this study. Many organizations could free up cash by better managing their maintenance costs, potentially creating funding opportunities for new equipment.

Strategic supply chain management

A strategic focus on the supply chain can reap significant savings for hospitals. It also can improve employee satisfaction, patient safety and outcomes.