Understanding what is hospital supply chain management
Hospital supply chain management is the governance of the flow of medicines, medical products, equipment and services from manufacturers to patients. It is a critical part of healthcare operations within a healthcare facility and involves:
- Inventory management
Supply chain management in hospitals however does not merely mean giving out medical supplies, pharmaceuticals and equipment. The trick is to ensure that the right products are available in the right quantities, at the right time, and at the right cost to support the best possible patient care.
There are several stakeholders in a hospital supply chain management system, including:
Manufacturers: Big and small research, vaccine and biological labs that develop products in response to demand and need.
Distributors: Those who sell and deliver the products, equipment and supplies.
Providers: Healthcare providers include hospitals, clinics, pharmacies, assisted living centers and long-term care institutions who place orders for products.
Patients: People who are ill and need the medical products and services and consume them.
Regulatory agencies: Are government entities that determine if the products and services are safe and in the best interests of consumers.
Payers: Insurance companies also play a role in assessing if the use of the products are reimbursable.
These stakeholders act differently as they have their own goals – a manufacturer may focus on ground-breaking research, while a distributor may pick up products that provide a better margin and a provider may simply prescribe a product preferred by a senior colleague. It is important therefore for a hospital supply chain management in healthcare to align itself to delivering quality patient care, even if it means roping in expert services.
Why is effective supply chain management in hospitals important?
Effective hospital supply chain management is vital for several reasons.
Just-in-time delivery: First, it ensures just-in-time delivery of medical supplies. By ensuring that healthcare providers have access to the necessary resources when needed, an agile supply chain management in hospitals has a direct and positive impact on patient safety and quality of care.
Cost containment: Healthcare costs are continuing to rise. Efficient hospital supply chain management helps in optimizing procurement and inventory practices and this leads to significant cost cutting. It helps to negotiate beneficial contracts and enhances budgets, facilitating further investments into quality patient care and expansion of healthcare services.
Reduction of waste:The National Academy of Medicine has estimated that the U.S. health care system wastes about $765 billion a year — about a quarter of what's spent. Hospital supply chain management best practices focuses on reducing waste. By minimizing excess and expired inventory, it improves sustainability.
A weak hospital supply chain management system will lead to treatment delays, compromise safety of patients and also reduce patient satisfaction. So, hospital supply chain management is rightly seen as the lifeblood of healthcare operations, while the use of mobile healthcare apps are at the heart of the supply chain management in hospitals these days. Designing and developing custom healthcare mobile apps is considered one of the leading hospital supply chain management best practices to overcome several problems.
Problems encountered in hospital supply chain management
Challenges that hospitals encounter in supply chain management, have a deep impact on financial health, patient care and operational efficiency. Here are some common challenges faced:
Overstocking: The problem of excess inventory not only ties up valuable resources but can lead to colossal wastage. For example, a hospital may stockpile perishable medications and supplies. This not only leads to financial loss but also deters timely and quality patient care. It also ties up funds that can be channeled for other critical needs.
Scenario:A patient with a life-threatening condition may be wheeled into emergency. The caregivers may be lulled into complacency as the inventory level of the drug required is high. Except that it is revealed that it has expired, just before administration to the patient.
Understocking: Conversely, understocking too can pose equally significant challenges. If hospitals run out of essential supplies or medications, there can be disruptions in patient care. It also leads to expensive emergency purchases, taking up costs.
Scenario:Imagine a surge in patient admissions, such as during the COVID-19 pandemic. Inadequate inventory management may lead to insufficient ventilators, at a time when patients are gasping for breath with dipping saturation levels. This adversely impacts timely respiratory support for patient care.
Expired supplies: Inefficient tracking and rotation of supplies can lead to the inadvertent use of expired products. This not only raises safety concerns but also results in financial losses due to the disposal of expired items. Despite mechanism like reverse supply chain, the return of expired drugs entails distributor costs as a percentage of the total value of the drug.
Scenario: During the flu season, a hospital procures the flu vaccine in large numbers. As it is a seasonal affliction, the stock gets pushed to the back of the shelf and when there is a re-surge in flu cases in the next cycle, the shots which have a shorter shelf life are useless.
Physician Preference: Inventory and carrying costs go up when hospitals order supplies based on historical models and physician preferences rather than actual utilization and expected demand. Physician preference items has been estimated to cost between 40-60% of hospital supply costs.
Scenario: When it comes to high-cost implantable devices, cardiac surgeons may prefer a particular stent, defibrillator, pace maker or heart valve. But studies conducted on different brands and their performance have often revealed that due to technological advancements, there are cheaper and more efficient alternatives.
In fact, Premier Inc, one of the largest group purchasing organizations in the US, led an initiative called the Partnership for the Advancement of Comparative Effectiveness Review. This helped save an estimated $8.1 million in cardiac stents and surgical mesh from 2014 to 2016. Hence, hospital supply chain management challenges need to be addressed proactively to ensure seamless healthcare delivery while optimizing resources.
Role of mobile apps in hospital supply chain management
Mobile apps have revolutionized supply chain management in hospitals by offering customized solutions to address challenges. This in turn has helped in improving patient experience and operational efficiency
Customized mobile app development can optimize hospital supply chain management
Real time supply tracking: Real-time supply tracking apps empower hospital staff with instant access to inventory data. The ability to monitor stock levels, expiration dates, and usage patterns helps to cut costs and maximize clinical outcomes.Manual tracking errors can be reduced by up to 60%, preventing overstock and understock situations, through the use of customized mobile apps in healthcare supply chain management, according to a Grand View Research.
Automated reordering: Mobile apps can be programmed to generate purchase orders automatically when supplies reach predetermined reorder points. Use of such apps reduces the burden on the administrative staff and eliminates the risk of understocking. According to a study in the International Journal of Supply Chain Management in 2021, automated reordering through mobile apps can reduce supply chain lead times by 30%, ensuring timely replenishment.
Expiry date management: Custom mobile apps can be used to monitor and manage supplies with expiry dates. The app sends alerts and notifications when items are approaching expiration. The hospital staff is able to prioritize the use of these supplies or redistribute them to prevent waste. According to data from the Healthcare Financial Management Association hospitals can save up to 25% on supply costs by effectively managing expiration dates through mobile apps.
In summary, mobile apps are indispensable tools in hospital supply chain management, and can be highly customized to significantly reduce errors, optimize inventory levels, and enhance operational efficiency, resulting in substantial time and resource savings for hospitals.
Real world success: hospitals transforming supply chains with mobile apps
Hospital supply chain management is seeing the increasing use of mobile apps to streamline processes and improve efficiency. Here are some real-world examples:
Medication inventory management: The Children's Hospital of Philadelphia uses mobile apps to track medication inventory. Scanning barcodes with the use of mobile devices, pharmacists and nurses are able to update inventory levels in real time. This helps prevent medication shortages and expirations, ensuring that patients receive the right medications when needed.
Reordering medical supplies: The University of Kentucky HealthCare employs mobile apps to automate the reordering of medical supplies. These apps monitor stock levels and generate purchase orders when supplies reach predefined thresholds. This reduces manual work for staff and ensures a steady supply of critical items.
Expiration date management: At the Mayo Clinic a mobile app helps to manage supplies with expiration dates. When supplies approach their expiration dates, the app sends alerts to staff, enabling them to prioritize usage. There is no wastage of valuable resources.
Temperature monitoring: Hospitals, like the Cleveland Clinic, rely on mobile apps to monitor temperature-sensitive supplies such as vaccines and blood products. These apps provide real-time temperature data. If storage conditions deviate from the optimal range, the concerned staff is notified through alerts. This helps to maintain the integrity of critical supplies.
Vendor collaboration: Global healthcare logistics company, Owens & Minor offers an app that allows hospitals to connect with their supply chain. Hospitals can track orders, receive alerts, and communicate directly with suppliers to ensure timely and accurate deliveries.
Clearly, mobile apps have become integral to hospital supply chain management as illustrated in the real world applications listed above. They improve inventory accuracy, reduce errors, and enhance communication between healthcare providers and suppliers. In other words, the use of mobile apps for hospital supply chain management in healthcare leads to better patient care and cost savings.