We all know that service quality has been at the forefront of healthcare supply chain management for decades. That’s the way we have been measured. That’s how we received our pay increases and bonuses. But now, more than ever, supply chain managers have a new mission beyond just service quality: to create the next generation of capabilities to become a peak performer in supply expense management.
High Service Quality Is a Given in Today’s Healthcare
We have all worked hard for years to provide the highest service quality to our diverse customer base to include: automatic replenishment systems, nurse servers, supply cabinets, etc., and we should be proud of our accomplishments. Regrettably, high service quality marks are a given in the new value-based purchasing environment that we are living and working in. We now need to be just as proficient with our savings quality so that our healthcare organization can remain stable and vibrant for decades to come.
High Savings Quality Is Just As Important
High savings quality requires that the savings you generate today and in the future must be double-digit, long-lasting, and encompass the total lifecycle cost of a product, service, or technology. No longer are we just looking at the price at the pump, but also at the mileage we get out of our commodities. For example, the lowest priced pulse oxygen sensor can actually be the highest cost oxygen sensor if it only lasts one patient day, instead of a patient stay. Therefore, our goal in this new millennium is to be more utilization centric than price centric in our purchasing decisions.
What Are Your Capabilities to Meet this Challenge?
Now that you understand what your savings quality game plan should be over the next few years, what are your capabilities to meet this challenge? The following checklist might be helpful in answering this important question:
- Do you have an active and productive value analysis team or teams?
- Are your savings yields on each and every project in the double-digits?
- Are every one of your group purchasing contracts working like gangbusters to save money?
- Is your contract compliance rate close to 100% on every commodity?
- Do you have the latest cost-cutting utilization management software?
- Do your department heads and managers have enough evidence to make the needed product, service, or technology changes?
This short list of questions is meant to give you a starting point for your own analysis of your savings quality capabilities. So take a few minutes to answer these questions. If you answer them all with a YES, then you are ready to meet your new savings quality mission. If not, you have some work to do.