Business Advisor: Stay Current to Control Supply Costs

A cardiac procedure is on the schedule and there are eight different-sized stents — at $80 a pop — that could be used. Your surgical team opens all eight, even though seven will likely be thrown away. That's $560 worth of supplies they're about to trash. All too often this sort of waste is baked into supply management practices.

What if there was a better way? Assigning staff members to review surgeons' preference cards, track use of supplies and change the cards to reflect actual supply usage can help you shave six — or even seven — figures off of case costs. At Stanford Health Care, where I used to work, updating the preference cards used in pediatric ORs reduced supply costs by more than $1 million, an 8% decrease. Achieving and sustaining this level of savings is relatively straightforward and very doable if you follow these basic steps.

• Gather data. First, select the highest volume procedure from each of your service lines. Have members of your surgical team review the preference cards for those cases and list in a spreadsheet the most expensive supply items they think could be eliminated. They should base their judgements on their experience and knowledge of how procedures are performed and what surgeons use.

As these team members work the high-volume procedures, they should make note of how many of the costly supply items were opened and how many were actually used. Over a period of several months, they'll have collected enough information for you to make data-driven decisions about trimming your supply budget.

• Pick the right person. Interestingly, the perfect staff member to review preference cards often isn't the charge nurse or another member of the team with 20 or 30 years of experience. These leaders are often desensitized to the amount of waste that takes place daily and aren't incentivized to reduce it, as the excess supplies at least seem to make the procedure that's in front of them easier to complete. Consider tapping surgical techs instead. They'll bring fresh eyes to the situation, will feel elevated about the responsibility and will take the job seriously.
• Maintain momentum. Surgical team members at many facilities already try to keep preference cards updated, but it's often done informally and inefficiently. It's also a time-consuming process that's often bumped down the priority lists of busy staff members.

When surgical techs (or whoever handles the data collection at your facility) start showing others their spreadsheet of supply items that can be removed from regular rotation, it often sparks a culture shift. Conversations begin among staff members and even surgeons about which items they can do without, and whether items actually need to be opened. At Stanford Health Care, this constant chatter led to real staff education about the actual costs of supplies, which we formalized in a fun way by running a Jeopardy-like game about product prices during daily huddles.

All you have to do for your efforts to make a real impact is get started.

• Scale the savings. The savings you realize from implementing a program like this will go beyond no longer purchasing unnecessary items. Nurses and techs will spend less time gathering 10 items for procedures when only five will do. They also won't have to remember to open supplies only if they're needed or spend time restocking unused items. Your team will appreciate being able to focus more of their attention on other important tasks.

Once your supply-tracking process gets started, staff members will see that it's working and making their lives easier — and saving your facility significant amounts of money. That's when it's time to consider putting more resources into the program to realize even more savings.

At Stanford Health Care, for example, the techs' spreadsheets served as a starting point for the creation of an automated algorithm that scoured electronic health records to determine which supplies were crucial and which weren't needed. The algorithm made corresponding updates to preference cards within the system. These changes created sustained cost savings over time without staff members having to manually update the cards.

You can implement a program for updating preference cards with your current resources at little to no cost. It could prove to be more effective at saving money than traditional efforts such as creating supply purchasing committees or implementing surgeon incentive programs. All you have to do for your efforts to make a real impact is get started. OSM