I’m sure you have heard the management phrase, “Push down decisions in the workplace” for the best results. In practice, it means your clinical department heads, managers, and supervisors should be able to make basic, repetitive, and rudimentary decisions without the need to consult with their boss or subject matter experts. For you see, with the right training, tools, and experience your clinician’s judgement is almost always better than anyone else’s. This is doubly true for clinical supply chain expense management!
Current State of Clinical Supply Expense Control
At present, your clinical department heads, managers, and supervisors only have their budget expense variance reports to control their supply expenses, which is a faulty system for these three reasons:
- Budgets aren’t based on actual requirements, but on prior year’s history: With few exceptions, supply budgets are static documents that use the prior year’s history as the starting point for the new year’s budget. This practice often understates or overstates a clinical department’s budget for any given year.
- Budgets don’t account for month-to-month volume and intensity variances: These static expense budgets don’t consider monthly shifts in volume and intensity, so they are less than accurate for holding a department head or manager accountable for increases in their budgets. The best budget tools adjust for variations in volume and intensity month to month.
- Budgets don’t show line-by-line product, service, or technology variances: All budgets use aggregate numbers, which makes it impossible to know what product, service, or technology is beyond budget limits. A much better way is to show variances for every product, service, or technology employed by a clinical department. Then there is no guessing needed to identify the exact commodity that is causing the variance.
In brief, the current state of clinical supply expense control is antiquated, inadequate, and ineffective. Isn’t it time to reinvent it at point-of-service?
Future State of Clinical Supply Expense Control
More and more, progressive healthcare organizations are putting their clinical supply expense control in the hands of their front-line managers (i.e., department heads, managers, and supervisors) who can then effectively manage their supply chain expenses. For this purpose, these healthcare organizations have adopted three guiding principles to assist their department heads, managers, and supervisors in this endeavor:
- Data must be intuitive: The data provided to clinicians needs to be easy to use and understand so they can comprehend the significance of any change in their utilization patterns.
- Data must be visual: The use of graphs, charts, and infographics to tell a story of why a product, service, or technology is historically higher than their peers’ is mission critical.
- Data points lead in the right direction: The data provided needs to be actionable vs. vague or unclear. There should be no confusion on what the next steps should be to eliminate an unfavorable variance.
The future of clinical supply expense control is at point-of-service vs. by remote control by the accounting department. This is the only way to move the needle on reducing your clinical supply chain expenses by as much as 11% to 19% per clinical department or unit.
Don’t Carry all the Savings Workload Yourself
I know it is hard for supply chain managers to give up control over your clinical supply expense budget, but if you remember that saving money and improving quality is a team effort it can become easier to let go. With your help, guidance, and training, your clinicians can save more money than you could do alone or with your value analysis team. Why? Only your clinicians can make changes to their supply formularies, policies, procedures, and processes. So, accept the fact that it is better to facilitate your healthcare organization’s clinical supply savings initiatives than slow them down or not save anything at all.