Where We Are
Most hospitals are grappling with the same sorts of challenges they faced in 2005…only now they’re even more pronounced. While we’ve seen great strides in technology to improve efficiency, most hospital supply chains are increasingly complex and have to deal with immense waste. And waste is exactly what we need to eliminate if we’re going to improve the overall cost and quality of care.
We see $5 billion in waste every year for high-value medical devices alone, largely because inefficient supply chains allow these devices to expire or go missing.1 And many facilities increasingly need a better way to manage their high-value, low-volume specialty medications.
The waste from inefficient use of clinician time is much more difficult to quantify, but the best estimates, based on studies, tell us that up to 30 percent of clinical resource time is allocated to supply chain activities.2 That’s time that could be much more effectively spent caring for patients. (In a previous post, I discussed how the supply chain optimization affects the bottom line.)
Above all, it’s become much more challenging to manage these realities, as IDNs grow larger, and as we’re increasingly expected to manage the total cost of care.
The Road Forward
Looking at these challenges, it’s clear we need bold new approaches to improving the cost-effectiveness of delivering quality care to patients. Intelligent supply chain technology is essential for managing total costs, and it begins with understanding the value stream from manufacturer to patient.
Crucially, we need solutions that can scale effectively. While improvements on a smaller scale can yield great benefits, significant savings and efficiency come with implementing solutions across departments across an entire health system.
Of course, in an industry with competing priorities, gaining buy-in to invest in any technology can be a challenge. Many supply chain decision makers have better success starting with a technology deployment on a smaller scale, in a single department for example, demonstrating the ROI and then building on that foundation. This can be a very effective approach, but it’s essential to consider scalability and future-proofing at the outset. Otherwise, you could end up overhauling all the initial work down the road.
This is a key reason RFID is set to take the stage as the gold standard for inventory management technology. Barcoding may work well for inexpensive products, but the physical effort required to scan each individual item along with the associated error prone processes can hold back efficiency gains on a larger scale for high value medical devices. RFID on the other hand can capture far more data than barcodes. The extensive automation and data capture that comes with RFID allows much greater value.
If you’re considering investing in RFID technology, make sure you think about the power it has to help along three dimensions of scalability: