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.

Orthopaedic surgeons in the pocket of the industry

The development of new orthopaedic products depends on a close cooperation between orthopaedic surgeons and the industry. However, in recent years a number of cases of financial collusion between the industry and parts of the professional orthopaedic environment in the US have been exposed. This has highlighted the question of the extent to which orthopaedic-related research and development may have been influenced by inappropriate financial incentives.

Environmental and financial impact of a hospital recycling program

Recycling decreases greenhouse gases (GHGs) emitted from waste disposal. A recent study determined the environmental and financial impact of recycling at a 148-bed acute care hospital in Cincinnati, Ohio. The hospital added single-stream recycling to its nonhazardous waste disposal practices in September 2008. The study measured the amount of nonhazardous waste generated and disposal costs from September 2008 to March 2009 for comparison with the same 6-month period in 2007-2008, calculating the environmental benefit using the Environmental Protection Agency's Waste Reduction Model (WARM). This study revealed that recycling benefits the environment and saves money. Recycling reduced GHG emissions by 34 metric ton carbon equivalents (MTCEs) and saved 632 million BTUs of energy. Pearson correlation for waste generation (r = 0.99, P = .002) demonstrates that the amount of waste generated between the control and intervention periods were very similar. Pearson correlation for facility operations as measured by admissions, outpatient visits, emergency room visits, and number of employees (r = 0.99, P < .007) also showed the 2 time periods to be very similar. The hospital's cost to dispose of nonhazardous waste decreased more than $4,670 after single-stream recycling.

Finance oversight can avoid millions in supply overpayment

Finance should lead purchasing contract development by: Establishing fair prices up front. Gaining buy-in from physicians. Developing a continuous system of controls.

The future of supply chain expense management

Supply utilization misalignments are commonly found in eight areas: Standardization, Over-specification, Under-specification, Too many hand-offs, Missing the big picture, Value mismatches, New technology, Old technology.

An empirical analysis of aftermarket transactions by hospitals

Almost all U.S. hospitals procure their equipment through group purchasing organizations ("GPOs"). Some hospitals subject the prices secured by GPOs to a second round of competition in an "aftermarket," in which vendors both on and off the GPO contract compete for the hospital's business. To measure the extent of the potential benefit to hospitals from another round of competition, we analyzed a database of approximately 8,100 aftermarket transactions for hospital capital equipment. The transactions data suggest that hospitals were able to achieve average savings of approximately 10 to 14 percent across the entire database (2001 through 2010) and a savings of 15 percent on average for 2010 data. These savings may be attributable to many factors, including the compensation structure of GPOs.

Centralized distribution: reducing ownership costs by streamlining hospital logistics

All Quebecers have access to a public health system that enables them to receive high-quality healthcare, regardless of their individual ability to pay. With the aim of improving effectiveness and efficiency and achieving cost savings in managing public funds allotted to the healthcare network, SigmaSanté intends implementing a central distribution of medical supplies needed by healthcare facilities in Montréal and Laval, Québec, as has been done in many other jurisdictions for numerous years.

Finding gold in the supply chain

To optimize supply chain performance and achieve savings that enhance the bottom line, hospitals should: Generate purchase orders for every item purchased. Ensure the organization is protected from undue vendor influence. Keep track of where supply chain dollars are going. Review contracts regularly to ensure competitiveness. Have a contract for each product category. Buy only what the organization is sure to use. Get rid of excess inventory. Develop a strategic plan for continued supply chain savings.

[Practice and discussion on classified coding management of medical disposable materials]

This paper describes the heart of class supplies involved in bidding and purchasing code library classification principles and, in the hope of medical supplies through the establishment of bidding and purchasing code library to assist the health authorities and medical institutions for effective quality control. Clinical research oriented, CT, volume, operation cost, cost per capita, BEP.