From the March 2011 issue of HealthCare Business News magazine
By William Zierolf
U.S. hospital systems are struggling to leverage and integrate the powerful capabilities provided by modern information technology. Most hospitals employ the basic elements of IT in managing administration and logistics, but lack the enterprise-wide integration of this technology and data that makes IT so powerful. The public debate over electronic patient records is only one dimension of this. Hospitals also lack wall-to-wall supply chain management tools that can link real-time inventory data to a hospital’s main information system so that it is centrally available to all personnel within the system.
What does this mean? In many areas essential to patient care, hospitals are flying blind. They are not exactly sure what clinical supplies they have, where these supplies are located or whether the items have past their expiration dates. This lack of transparency leads to higher costs in two ways. First, when essential clinical supplies are missing or expired the day before a medical procedure is performed, they must be ordered piecemeal and shipped overnight (the most expensive way of ordering supplies). Worse, when it is discovered the day of a procedure the only option is to cancel or postpone the procedure. Second, without a detailed, accurate accounting of the supplies actually used in a patient’s treatment, patients can be over-billed for unused items or the hospital absorbs the cost of items actually expended. Either way, someone gets the short end of the stick. More troubling, without a clear understanding of which patients received exactly what items – like a hip implant - there is no way to effectively deal with the product recalls that happen from time to time.
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Fortunately, there is movement afoot to deal with these problems in a way that not only improves patient care, but also reduces cost. Up until now, most hospitals have dedicated their investment dollars to upgrading their clinical technology, creating a significant gap between hospital medical technology and the IT infrastructure used to manage actual patient care. Believe it or not, the kind of basic supply chain technology, infrastructure and methodologies that you find in any manufacturing facility or shipping hub in America is non-existent in most hospital systems. With the advent of value-added providers of these capabilities, hospitals are reexamining everything from patient records to insurance processing, and looking for ways of leveraging the IT revolution and improving supply chain management is an essential component of this system upgrade and overhaul.