To paraphrase an article we recently read, supply utilization management can be just like a slot machine. Think of all of the millions of combinations you can end up with when you pull that lever – and how random it is that you’ll get a great return when you do. That’s how it is when you treat supply utilization management like gambling as opposed to a science. Your gut or hunches can only take you so far. At some point in time you will need to employ supply utilization analytics to remove the game of chance so that you can be truly successful in supply utilization management.
We, Too, Played the Game of Chance for Years
Fifteen years ago we, too, used our gut and hunches to uncover our clients’ supply utilization misalignments (i.e., wasteful and inefficient consumption, misuse, misapplication, or value mismatches) in their supply streams with the result that we only uncovered meager savings for them. It was just plain old frustrating for us and our clients sitting at that slot machine; we needed hundreds of tries to save small amounts of money. What a waste of time and staff resources!
Then We Got Smarter and More Scientific In Uncovering Them
Once we realized that our clients’ supply utilization savings were real and robust, we then decided to be smarter and more scientific about uncovering them. After much research and trial and error we then developed an Activity-Based Supply Utilization Management System to identify, track, trend, and then capture all of our clients’ supply utilization savings, which represented 7% to 15% of their total annual supply budgets. No more frustrating push back or lack of proof that savings were real. This supply utilization management really works!
The Job Just Gets Bigger and Bigger
The job of the supply utilization manager is getting bigger and bigger every year, since the science of medicine is getting costlier and more complex. For instance, just one supply utilization misalignment on one everyday product category (absorbent hygiene, IVs, wound care, and everything in-between) could be costing your healthcare organization tens or hundreds of thousands of dollars more per year than it should be. If your hospital, system, or IDN has 5, 8, or 10 thousand SKUs, your corporation could be looking at multimillions in supply utilization savings annually. With these facts in mind, it makes sense to make, buy, or rent a supply utilization management system to be smarter and more scientific about controlling these hidden cost savings.
Why Continue to Play the Game of Chance When You Can Know for Certain Where Your Supply Utilization Resides
If your doctor told you that he had a hunch, feeling, or intuition that you have pneumonia and then prescribed a strong antibiotic, you would probably look for a new doctor. But if your doctor told you that he is 99.6% certain that you have pneumonia based on a series of scientific tests, you would probably agree with his diagnosis and take the prescribed medication.
With this scenario in mind, why aren’t we, too, being more scientific or 99.6% certain with our search for supply utilization misalignments? Why do we continue to gamble with these savings? The lesson here is: Stop using a slot machine approach to uncover your supply utilization savings and start to use a scientific method for more and better savings for your healthcare organization.