Focusing on improving your supply activities is exciting in healthcare today. The idea is to understand how your assets and your supplies are used when providing service. You want to nurture the Eco-system: if your assets are not available, or you’ve run out of supplies, it takes longer to provide the service, which means providing fewer services. Fewer services mean more expensive services because the overhead to run your organization is carried by fewer billable services. In other words, spending your budget wisely on assets and supplies empowers your services.
Let me repeat: Budget is what empowers your marketable services. Usually budget is experienced as the limiter of marketable services. How many times have you thought: I would love to do that, if only I had the budget!
Tracking technology and analytics are transforming how budget is experienced in the healthcare industry. Both items, tracking and analytics, are bringing powerful information to administrators so that they can align their budget to support their services. How is it happening?
Data is being tracked to provide use-rates of equipment. When an administrator understands that equipment is at full usage, and that equipment is involved in services that provide a significant portion of revenue, it is easy to justify buying another piece of equipment. Not only can you justify it, you can forecast ROI, and impact to future revenue. Visibility into the impact of your budget spend is provided by analytics.
Equipment is being tracked. When you can find the equipment, you can use it. When you can see the use-rate of your equipment, you can plan for its use. When you can’t see the use-rate of your equipment, you either over-spend or under-spend, not knowing that you are doing either. There is a lack of visibility. Tracking equipment identifies unused assets or shall we say idle budget. Idle budget is driving up your cost of service.
Equipment that is being tracked is as large and complex as an ambulance and as small and straightforward as a wheelchair. Sometimes the important thing to track is the really expensive item. But hospitals are finding out that the most important thing to track is the mobile item – when it can be moved, it can be lost or taken. When it can be moved, ownership and responsibility are unclear. Technology is being miniaturized. And the smaller things become, the easier they can be moved, borrowed, stolen, or misplaced. Whatever you call it, it’s your budget that is being misused.
Why do you want to know where your equipment is? You already bought it! It should be used! You did spend last year’s budget on it. Just think, last year’s budget is ensuring you’ll deliver this year’s services. Its free money – or at a minimum, its other people’s money! Besides, spending your money replacing something because you can’t find it is just plain old embarrassing.
But the power of data and tracking is just starting to be realized in supply chain in healthcare. Asset management plays a big role. It is the real-time tracking of supplies and equipment, combined with real-time information about supply that is providing powerful intelligence that makes successful health-care providers. Integrated information about the use of disposable commodities, enabled by RFID tracking, keeps supplies at constant levels – there is no over-spend nor under-spend. And the staff isn’t filling out a spreadsheet to justify supply levels. RFID enabled cabinets are providing hospitals with automated inventory functions while providing clear chain-of-custody for high-risk items. And the most forward thinking administrators integrate suppliers with their supply chain software, producing end-to-end purchasing efficiencies.
Healthcare administrators are in effect creating supply partnerships. Now that is using your budget to empower your services.