Monitoring your operation’s velocity, intensity and frequency yields big savings

More importantly, our clients are telling us that by having this demand data at their finger tips they are able to spur their physicians and department heads into action. As an illustration, one of our client’s anesthesia trays jumped 21 percent (or $8,297) in frequency, over five quarters, even though their patient days (CMI-adjusted) for this same period were actually down by 2 percent.

This undisputable fact, driven by data, enabled our client’s materials manager to start an open and collegial dialogue with their anesthesia department to understand, comment and then receive feedback from them on this obvious anomaly. In this situation the anesthesia department quickly discovered the reason for this variance; their staff was throwing out about 20 percent of their disposable anesthesia trays because the spinal needles were falling out when they opened a new 10-pack case of trays due to defective packaging. Happily, this was a no-brainer for the materials manager to solve this problem.

Without this demand management data our client wouldn’t have known where to begin a relevant discussion with their anesthesia departments on their anesthesia tray’s utilization trends, patterns and variances. However, with this demand data at the ready he was able to question, persuade, and coax his peers to change their costly practice or to have them value justify why this anomaly is happening.

As another client related to me the other day, without demand data to guide you, it would be like looking for a needle in a haystack. Conversely, with demand data all you need to do is follow the numbers and this will give you direction on where you need to focus your time and energies in order to save even more money.

This is the power that timely and accurate information can give you. You will know more about the commodities that you buy than your hospital’s directors, clinicians and vendors. "As a general rule," Benjamin Disraeli, the British Prime Minister in the 1800s, once said, "The most successful (person) in life is the (person) who has the best information." As a result, no longer do you need to be frustrated or put off by your directors and clinicians side-stepping, bobbing and weaving or trying to nullify your savings recommendations when the numbers will clearly show you and them the way to savings results.

Although I’m a big proponent of benchmarking I have found that this technique alone won’t give you the actionable data that you will need to root out any and all of your supply chain non-conforming practices that you might have uncovered through benchmarking.

That’s where demand data comes into play. We have found that it is rare that we will discover a benchmarking variance in a client’s supply expenses at 30,000 feet that doesn’t also show up in our client’s demand data at their stock-keeping unit or ground level.

Just the other today, we were looking at a client’s surgeon’s glove benchmarking data that showed a $16,239 variance that also showed up in this same client’s demand data. The demand data indicated that this client’s surgeon’s gloves usage was spiking up over four quarters even though their case load was flat. We also observed from the data that their sterile processing and distribution department was using expensive surgeon’s gloves for their work, which seemed inappropriate to us when less expensive multi-purpose disposable gloves were available for their use.

With this actionable data in hand, our client will demonstrate value justifying these obvious inconsistencies with his operating room director to insure that his surgeon’s glove expenses are within acceptable limits. One thing for sure, without this demand data our client would be like a blind archer searching for an elusive moving target that he would never hit straight on.

As I’m sure you have already realized, it is getting harder and harder to save money for your healthcare organization. Therefore, you will need new and better ways to uncover where your best savings opportunities reside and then to quickly, easily and seamlessly implement them. Our clients have found that "demand management" is another significant tool for them to add to their supply chain toolbox to make their mission-critical chore of saving money a whole lot easier.

Robert T. Yokl is president and Chief Value Strategist of Strategic Value Analysis In Healthcare, which is a leading healthcare firm in supply and process value analysis. Yokl has nearly 30 years of experience as a healthcare materials manager and supply chain consultant, and also is the co-creator of the Utilizer Dashboard that extends beyond spend management for deeper and broader utilization savings. For more information, visit www.strategicva.com. For questions or comments e-mail Yokl at bobpres@strategicva.com.