Hospitals around the world experience similar and costly challenges when it comes to managing clinical supplies. Most hospitals only track “perpetual” commodity supplies or document select implants, and a huge portion of products are never tracked or accounted for whatsoever. This is the blind spot, and it’s one of the causes for our skyrocketing healthcare costs.
Waste is endemic to the entire healthcare system, and it is costing hospitals and medical products manufacturers – and ultimately patients – billions of dollars every year. Costly implantable devices are expiring on the shelves, never used. Departments are also over-stocking products because they don’t have PAR levels aligned with the actual need. Common problems arising from such a surplus include unnecessary product variety, exaggerated quantities by SKU, an inventory composition that is misaligned with physicians’ preferences and reordering based on guesswork rather than data.
Waste and loss of revenue, however, are far from the only concerns. Mismanagement of clinical inventory is causing serious risks to the business of running hospitals. Take the problem of overbilling, for example, which happens when supplies are recorded as being used in a procedure when, in fact, they aren’t. This kind of occurrence is commonplace and, stated simply, constitutes billing fraud, a major liability risk for the healthcare organization.
Another major liability risk that is even more serious – because it cuts to the heart and soul of the healthcare industry – has to do with patient care. Consider the phenomenon in many hospitals where products that are used in patient procedures are never actually recorded. Of course, this problem results in vast underbilling and, thus, a loss of precious revenue. But product documentation mistakes made in patient procedures clearly don’t just affect billing. They also adversely affect patient safety, because product usage errors made at the point of care enter the clinical supply documentation process and thus carry over into the patient’s medical record. Electronic medical records are becoming increasingly common in the healthcare field, but why implement them if the data contained in those records is inherently faulty and unreliable?
Furthermore, tracking an expired or recalled device to a patient when that device was never recorded is a nearly impossible task. Most hospitals manage their recalls extremely poorly; without an advanced inventory control system to track recalled items effectively, the task of determining which patients have received which recalled product becomes Herculean.
The blind spot in hospitals is caused by many interwoven factors. It’s the result of having inadequate or no technology tools, but it’s also caused by broken processes and a lack of accountability. And although they may appear to do so, neither materials management information systems nor clinical documentation systems are designed to track and report on every clinical product throughout the hospital cycle. When clinical inventory is not managed properly, an invisible gap is created between materials management and clinical departments. This gap results in an inability to manage each individual stock item or physician preference item from the moment it enters the hospital until the moment it is used in a patient or removed from the inventory. It also means that clinical departments cannot track items precisely with lot/serial number and expiration date in order to ensure that an expired or recalled item is not used on a patient.
Effective and efficient clinical inventory management and clinical supply documentation are no longer luxuries. They help hospitals improve patient safety through recall and expiration management, cut costs by preventing waste and maintaining smart PAR levels, prevent under-billing and increase revenue capture, prevent overbilling and avoid billing errors and fraud, and boost staff productivity and physician satisfaction.
Arnold Chazal is CEO and Lana Makanik is vice president of business development of VUEMED, a global healthcare technology company that offers software and web-based solutions for the documentation and tracking of medical products, devices and supplies. VUEMED recently partnered with Optimé to create OptiVue™, a suite of technology tools that give hospital managers and administrators reliable and comprehensive clinical utilization data, as well as the means to analyze and act on it.