Becker's Hospital Review

July 2017 Issue of Becker's Hospital Review

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52 Before standardizing SKUs, leaders stressed the need to understand how many items are in their inventory to arrive at an apples to apples understanding of what standardization looks like. For example, the director of supply chain for a six-hospital system says her health sys- tem first took time to develop its own definition of "standardization" before working to reduce SKUs. "We have 600,000 items on contract and 115,000 items on formulary for med-surg alone," she says. "For us, standardization represents 80 percent of products from one vendor across all locations." e senior executive director of supply chain management for a 40-hospital system with 225 clinic locations says SKU standardiza- tion also comes down to right-sizing decision-making. He says it is helpful to rein in ordering processes so they are enacted by a small but fully informed and decisive group. "Staff members oen order products they don't need or just can't find," he says. To overcome organizational inertia associated with product stan- dardization, McKesson recommends including clinicians in the pro- cess and showing them the data. Allow some flexibility for lower-cost physician preference items — think of it as an investment for getting buy-in. Establish limited product catalog formularies that allow for quick searching and rapid ordering. Distributors should be able to provide the analyses and system functionality to make this happen. 3. Data analytics Health systems have increasingly recognized the value of data ana- lytics to drive financial and operational improvements over the last decade. Yet few health systems use data to drive their purchasing strategy, since it's difficult to collect, organize and store the immense amount of inventory, cost and utilization information on a central- ized platform for a system's network. is data is critical, however. Aggregated purchasing data offers supply chain leaders heightened visibility into spend and utiliza- tion habits, all of which inform purchasing decisions and standard- ize products. When your facilities are not all on the same systems, sophisticated solutions are available to aggregate purchase history, technology utilization, contract compliance and cost saving analysis across all non-acute facilities into a single dashboard for measuring overall performance. e senior vice president of a nonprofit health system with more than 120 affiliated entities — and president of one of its 10 member hos- pitals — says this data also helps physicians make more cost-effective care decisions. As one physician at the health system told him: "Don't think we wake up every morning and try to spend as much of the health system's money as we can. Give us the data, and let us come to you with what we think is the right answer." e executive's system places a portion of the cost-reduction respon- sibilities onto physicians, and found they are very passionate about the cause. e system also uses its own health plan to look at the total cost of care and identify areas to lower spending in non-acute set- tings, he says. Health systems must look at their data to gauge their progress and success in transforming the supply chain, according to the COO of a large academic hospital. "It all relates to reducing waste, making sure we have the best value for what we're spending and achieving the right clinical outcomes," she says. ©2017 McKesson Medical-Surgical Inc. n 1,500+ ATTENDEES FROM ACROSS THE NATION REGISTER BY AUGUST 1, 2017 AND SAVE! 3RD ANNUAL HEALTH IT + REVENUE CYCLE CONFERENCE SEPTEMBER 21-23, 2017 HYATT REGENCY | CHICAGO, ILLINOIS 150 SPEAKERS FROM HOSPITALS AND HEALTH SYSTEMS 255 SPEAKERS TOTAL THE BRIGHTEST CIOS, HEALTH IT AND REVENUE CYCLE EXPERTS IN HEALTHCARE REGISTER HERE www.beckershospitalreview.com/ health-it-revenue-cycle-conference/ Registration@BeckersHealthcare.com OR 800.417.2035. George W. Bush, 43rd President of the United States of America Edward Marx, Executive Vice President, The Advisor y Board Company; Interim Chief Information Of ficer, NYC Health + Hospitals Sugar Ray Leonard, Boxing Legend, Successful Entrepreneur and Author, The Big Fight: My Life In and Out of the Ring Amber McGraw Walsh, JD, Chairperson, McGuireWoods LLP Mary Alice Annecharico, MS, RN, Senior Vice President and Chief Information Of ficer, Henr y Ford Health System Shafiq Rab, MD, Regional Senior Vice President and Co-Chief Information Of ficer, Hackensack University Medical Center Daniel J. Barchi, MEM, Senior Vice President and Chief Information Of ficer, New York-Presbyterian Susan Salka, Chief Executive Of ficer, President and Direc tor, AMN Healthcare Ser vices KEYNOTES BY

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