White Paper: Best Practices In The Supply Chain Reduct Healthcare Costs

Cumbersome manual processes in the healthcare supply chain affect budgets and impact the delivery of care. Best practices involving standardizing data capture processes present a win-win situation, saving costs by saving time, while also improving patient care.

With extreme pricing pressures on today's healthcare providers, reducing costs while delivering high-quality medical care is a top strategic imperative. To achieve this objective, provider efforts have been focused primarily on eliminating waste in clinical operations, for example, through initiatives that reduce unnecessary testing and the length of hospital stays. While these are valid and important ways to reduce healthcare costs, one area that consumes nearly one third of all hospital operating budgets often remains overlooked — the healthcare supply chain.

Inconsistent data standards for product, trading partner and customer locations translate into substantial inefficiencies in the healthcare supply chain, where manual data processing is typically required as orders and product shipments travel through as many as 17 different locations.2 Inefficiencies may start inside the hospital at the beginning of the demand cycle, where inventory management procedures require workers to collect information on paper that must then be entered into the computer — a double-touch of data that introduces ample opportunity for errors. Orders are compiled using product identifiers from the first distributor in the supply chain. As the order continues its journey, lack of standardized identifiers forces distributors and manufacturers in any particular ‘order chain' to manually translate the incoming product numeric identifiers to their own legacy identifiers. Time, cost and errors are added into the end-to-end order fulfillment process — from pricing discrepancies that delay payments, to the delivery of wrong products, or address errors that result in costly misshipments and late deliveries.

These paper-based processes plus a lack of data standards reach beyond back office operations right to the patient, potentially affecting the quality of care. The slow movement of information inherent in paper-based processes combines with legacy product identifiers, increasing the complexity of reverse logistics and asset tracking, and hampering the identification of products that have been recalled, from a medical device to medication. The resulting delay in transferring information between manufacturer and healthcare provider could result in the inadvertent use of recalled equipment or the administration of tainted medication — situations that may put patient health and safety at risk. Access This Content To Read This White Paper In Its Entirety.