Analytics-driven business intelligence is your hospital’s “killer app.” Today, we’re going to tackle purchasing, showing you where an analytics-based approach pays off big time.
Here’s a primer on how your community hospital should use healthcare analytics to make smarter purchasing decisions.
An artisan is nothing without the right tools. Michelangelo didn’t craft David by hand, after all.
Similarly, if you want to successfully use healthcare analytics to meet and exceed your goals, you must invest in high-quality, custom reporting solutions that automatically deliver relevant information — your artisanal tools — from your hospital’s HCIS.
Your inventory program, EHR and other systems are loaded with useful information that help you determine poor supply utilization in your organization, ensure purchase contract accuracy, find the best prices for supplies and equipment, and reduce loss or waste of high-cost or frequently used supplies.
Once you have the right reporting systems in place, it’s time for your community hospital to start looking at the actual pieces of your purchasing puzzle: relevant metrics.
Start by reviewing:
- Inventory turnover. Procure reports from your inventory system that show you how often your purchases get used in practice. Right now you might have to run multiple reports to track inventory usage. Instead, consider a custom report that pulls purchase dates, usage and cost to analyze turnover.
- Implant use and cost. Make sure you pay special attention to the cost and use of implants, which are typically expensive. This report might be more applicable in your OR data. If your system doesn’t show the cost of items, consider adding that so the data can be studied.
- Surgery case cost (by provider). Find out which providers are driving up surgery costs and which are more economical. Again, this might be data that could be found in your OR department.
- Medication shelf life. Determine the shelf life of your stocked medications, assess use and see where you might be overstocking or understocking.
Since more advanced analytics typically require a larger technology investment, your community hospital should use this shortlist as a purchasing starting point.
Now that you’re pulling the right healthcare analytics together, use them to guide your operations and reach your financial goals.
First, focus on managing supply costs. The data you’ve captured helps you plan your spending budget to more accurately avoid unforeseen complications. Calculate projected total costs and make sure they’re accounted for in your long-term spending strategy.
Next, identify supply loss across all areas. For example, your systems should track and clearly report medication expiration. You might be shocked to learn how much medication is going unused on a monthly or annual basis. Use supply loss metrics to shrink your margin of error and improve your annual spend.
Finally, use your analytics to make your service contracts airtight. Armed with a more complete picture of your product usage and long-term costs, negotiate more valuable, strategic contracts with vendors.
By leveraging these healthcare analytics to drive your community hospital’s purchasing decisions, you bring your spending strategy in line with your broader financial goals and ensure your decisions are rooted in evidence. At your next planning session, think about ways to pull better analytics and how to apply those analytics to your strategic process.
You’ll be thankful you did.