We in the supply chain management are all familiar with ARHMM’s Cost, Quality, and Outcomes (CQO) movement, but have we thought about how increased supply utilization (i.e. use, consumption, or application) effects the quality of our patient care?
Discover How Increased Supply Utilization Effects Your Patient Care
I think it is easy to understand how all costs associated with delivering patient care and supporting the care environment come about and how financial reimbursement driven by outstanding clinical care can improve our healthcare organization’s bottom line, but how does quality play a role in the CQO equation?
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ABH Hospital Operational Issues |
ABC Hospital Quality Problems |
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The above exhibit shows how a hospital’s operational issues have caused three costly quality problems because of the supply utilization consumption effect. This phenomenon can and does happen at every healthcare organization and with every product, service, or technology over time. If not monitored effectively and proactively and eliminated by supply chain managers it can cost your hospital, system, or IDN multi-millions of dollars annually in utilization misalignments. This is a fact!
How Do Utilization Misalignments Alert Us to Our Supply Quality Issues?
Our 15 years of experience in clinical supply utilization management has repeatedly shown that when there is an increase in activity-based usage (i.e., every commodity has a corresponding activity that triggers its use) of a product, service, or technology, adjusted for volume, 80% of the time it is caused by a quality (i.e., free of defects, deficiencies, and significant variation) issue. That’s why it is mission critical for supply chain managers, due to the Affordable Care Act, to also consider quality their job #1.
What Does this Mean for the Future of Supply Chain Management?
Supply chain professionals need to understand that under the Affordable Care Act supply chain management need not only focus their efforts on reducing the total cost of acquisition to disposition of the products, services, and technologies they are purchasing, but to aggressively monitor and control the quality of the policies, procedures, and processes that support them. Then, and only then, can your healthcare organization have the capability to have outstanding patient outcomes at the appropriate cost.