Lee Smith, RNFA, BSN, MBA, is vice president of Clinical Solutions at 

Syft, a healthcare supply chain management company

. Smith has more than 35 years of experience in healthcare, including numerous years in hospitals as well as 20 years in supply chain and information technology.

Lee Smith

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When it comes to supply chain management, the healthcare industry comes in last place; and it’s paying the price. Antiquated processes that create inefficiencies, unnecessary expenses, and staff dissatisfaction are contributing to financial challenges that have only been exacerbated during the pandemic.

There are so many inefficiencies in the hospital supply chain. Just one example: demand forecasting, especially helpful for pick preparations, is nearly impossible at many organizations. In some hospitals and health systems, staff spend 

58% of their workday on indirect activity

, such as searching for supplies needed for patient care activities. That's a serious problem.

Not to mention the feat of trying to ensure the right supplies are on hand at the right time. Thanks to so many backorder and alternate suppliers entering the market, manufacturers and medical surgical supply distributors are not accountable anymore. That’s dangerous, too, because supplies expire. That impacts not only quality of care but the bottom line.

Financial challenges to hospitals are continually growing due to lost revenue from delayed care and canceled elective procedures during the pandemic. Plus, the skyrocketing rate of overburdened nurses and staff has forced budgets to absorb expensive staffing resources as these employees opt out of healthcare work.

Hospitals can overcome these challenges. It just takes focus—in this case on the supply chain—in four areas.

Focus Area #1: Use analytics to reduce supply chain waste and identify opportunities to reduce variation


Effective supply chain analytics can reduce costs by helping hospitals more proactively identify and use items before they expire. Analytics also help lower the cost of unnecessarily high physician preference items (PPI). Analytics can also help with hospital-wide standardization, especially for areas like surgical PPI, which account for 40% to 60% of a hospital’s total supply cost (excluding medications).

A recent survey of hospital supply chain leaders found that 94% believe supply chain analytics reduce supply costs. Just over three-quarters (76%) say supply chain analytics spur higher care quality, and 61% say analytics impact staff satisfaction and retention. In addition, 43% of these leaders say they lost nurses due to supply challenges or shortages.

Focus Area #2: Improve supply chain efficiencies to maximize OR throughput


One of the main drivers of inefficiencies and delays in the OR is supply disorganization. When processes are made more efficient through a supply chain management platform, operating room throughput increases, which means revenue also increases.

Regular inventory count is a critical component of cost-savings in the OR. In addition, RFID and barcode scanning point-of-use tools can help nurses and staff document supplies more efficiently. Having non-expired inventory ready and available increases job satisfaction and efficacy of OR nurses, as they won’t have to leave a patient during a procedure to hunt down supplies.

Focus Area #3: Reap continual margin improvements with AI and demand forecasting


Demand forecasting with AI technology minimizes errors and ensures more appropriate inventory volumes. This prevents stockouts and cuts expenses from over-ordering. A McKinsey study, found that using AI to enhance supply chain management could cut forecasting errors by 20% to 50%. AI and demand forecasting can also reduce the likelihood of supply shortages, which, as mentioned above, is a significant impairment to workflow efficiency.

As hospitals investigate supply chain management platforms, they should prioritize those that include AI and demand forecasting tools, as well as real-time insights into inventory, cost variances, physician benchmarking, procedural demand forecasting, and supply standardization. They should also seek out tools that integrate with the hospital’s other technologies (such as the EHR, ERP, and MMIS), to improve margins while reducing the risk of errors.

Focus Area #4: Reduce staffing costs and improve retention


While upwards of 80% of C-level hospital executives think their organizations manage the supply chain well, they underestimate how supply chain problems are directly affecting staff. For instance, a survey of nurses shows that 86% say their current supply chain documentation systems cause them stress.

Staff who don’t have the tools to work smarter must work harder, which affects morale and job satisfaction. The addition of automation for handling manual tasks contributes significantly to retention and the reduction of staffing agency expenses.

Integrating supply chain efficiencies to optimize clinical workflows is the secret ingredient for staffing success as supply chain management frequently translates to higher staff satisfaction.

Improving the supply chain drives gold-medal success

Hospital executives are realizing the strong connection between supply chain and finances. After suffering through a pandemic that’s lasting more than two years, hospitals deserve some record-breaking success.

Betty Jo Rocchio is Mercy’s senior vice president and chief nursing officer. Previously, she was the chief nursing optimization officer at Mercy after serving as vice president of perioperative services. Prior, Betty Jo held several leadership positions in the Mount Carmel Health System in Columbus, Ohio. These included chief nurse anesthetist, system director of surgical services, and vice president of nursing and chief nursing officer. 

Lee Smith, DHA, MBA, BSN, is chief nursing officer at Syft where she is responsible for guiding customers through the implementation of the Synergy point-of-use and analytics solutions. Lee has more than 35 years of experience in healthcare, including 21 years in supply chain and information technology. In her career, she has served as director of surgical services and leadership positions at Cardinal Health, CareFusion, and BD.

Articles

A look at the challenges hospitals face due to an insufficient supply chain—and how to address them.

Hospitals Aren’t Investing Enough in the Supply Chain and They’re Paying the Price

Hospitals and health systems have made great improvements to supply chain management processes over the past few years, but many have overlooked a critical stakeholder: Nurses. Nurses are heavily impacted by the supply chain, and often face significant challenges as a result of the cumbersome and time-consuming workflows associated with it.

 underscores the scope of the problem­—and the consequences hospitals may face as a result. Eighty-six percent of nurses said supply chain workflows cause them stress and 85% said documenting supplies is challenging. One in five said they have even considered leaving their current role because of supply chain problems.

Supply chain problems also threaten patient safety and margins. The survey respondents identified missed revenue as the biggest ramification of poor supply chain processes, and nearly one in four said they don’t have time to check product expiration or recall dates before using supplies.

As recognition of the need to create a more nurse-centric supply chain grows, leading hospitals are exploring new approaches. Here’s how your hospital can get started.

Implementing changes that complement and enhance nurse workflows

Many hospitals rely on closed cabinet systems for supply chain management, but such systems are expensive and require nurses to complete multiple steps to obtain and document supplies. They must first sign in, unlock the cabinet, pull the product, close the cabinet, and then manually enter the supply data in both the EHR and ERP if this integration does not exist. Time is not a luxury nurses have, and poor documentation workflows like these take a toll. In fact, nearly two-thirds of nurses who participated in the survey said their supply documentation system is time-consuming.

As hospitals seek to improve nurse workflows, many are moving away from closed cabinets to handheld barcode and RFID scanning tools. With these point-of-use (POU) tools, nurses can simply grab the supply from an easy-to-access location like an open bin and scan it. The supply is then automatically documented in the EHR and ERP.

POU tools are particularly useful in the ICU or operating room, since nurses can easily scan and document additional or unexpected items needed during procedures, and then quickly return their focus to the patient.

The transition to POU tools isn’t that difficult. Many hospitals are providing nurses with handheld devices integrated with new POU technologies and other existing hardware. To document chargeable items, nurses simply log into the supply chain management system using their mobile device, tag the patient, and scan the supply.

Top benefits of nurse-centric supply chain workflows

Improving supply chain processes helps nurses focus more on direct patient care, improving their satisfaction and reducing their stress. This is critical to both nurses and their hospitals, as physician and 

nurse burnout costs the U.S. more than $30 billion every year,

 according to the National Taskforce for Humanity in Healthcare.

 Since barcode and RFID scanning tools are easy to use and ensure automated documentation in the EHR and ERP, they increase the scope and accuracy of information captured. In fact, 

studies show that the application of RFID tags to supplies reduces costs

, improves safety, and increases the ability to track and monitor patient billing.

Greater support for value-based reimbursement initiatives. 

Streamlined workflows and supply chain optimization help nurses and other clinicians respond more quickly to patients’ needs. 

 and higher patient and nurse satisfaction, according to a late 2019 article in PSQH.

Product recalls and expirations occur frequently in the hospital supply chain. In fact, between 2002 and 2016, 

806 million medical devices were recalled

. Effective POU tools issue real-time alerts if a recalled or expired supply is scanned, helping ensure they aren’t used for patients.

Beyond POU: Advanced data analytics and insights drive continuous improvement

Supply chain management solutions that aggregate critical supply-related data are hugely beneficial in surgical and procedural areas. With these tools clinical leaders can easily identify improvement opportunities and nurses are equipped with tools to tackle tasks more efficiently. For example, physician preference cards list the supplies physicians want for procedures, and nurses and supply chain teams use them to pull items. Yet 97% of nurses who participated in nursing survey said physician preference cards are often inaccurate, and 95% said this decreases efficiency. 

Data analytics and insights can help by generating a list of additional items that should be pulled prior to a procedure based on utilization trends. This reduces the likelihood that nurses will need to leave the OR to gather last-minute supplies during procedures, and it improves patient safety by shortening procedure and anesthesia duration and reducing the risk of a patient infection.

Further, artificial intelligence and machine learning based solutions also helps reduce waste and improve hospital margins. For example, it can support cost/variance reports by surgeon and/or procedure to help hospitals identify when lower-cost physician preference items are likely to result in similar or better patient outcomes. It can also identify trends related to supply usage and waste, such as when supplies are routinely pulled and opened but rarely used in a given procedure. 

While supply chain technology can greatly enhance and complement nurse workflows, hospitals should obtain nurse input prior to making any decisions related to supply chain optimization initiatives. Failing to secure their input can lead to blind spots that needlessly frustrate nurses while limiting the benefits of the new technology. Involving nurses up front will also help secure their buy-in for any supply chain improvement initiative your hospital decides to pursue.

Lee Smith, RNFA, BSN, MBA, is the Vice President of Clinical Solutions at 

Eighty-six percent of nurses said supply chain workflows cause them stress and 85% said documenting supplies is challenging.

Lee Smith

Articles

Hospitals Aren’t Investing Enough in the Supply Chain and They’re Paying the Price

Why Building a Nurse-Centric Supply Chain Matters