Having My Say

Cost Saving Tip #18 –
Manage your custom kits
by David S. Kaczmarek, FDPHM, FAHRMM

Custom kits and, more recently, custom procedure packs are popular options for some users. The rational for custom kits is simple – put all the disposable sterile items needed for a procedure in one tray. This saves the department staff the time they might use to pull all the items and to open them individually onto the sterile field. Custom procedure packs takes the same concept one step further and packages the non-sterile disposable products with the sterile kit in one large case or procedure pack. The purchase price of these is kits invariably more than the sum of their components. The cost is supposed to be offset by the labor savings (because of the reduced time it takes to set up for the procedure) and inventory savings (because the items in the kit do not have to be stored and ordered separately). There is sometimes purported savings in the cost of some of the goods since the kit maker buys them in bulk rather than individually sterilized.

There is an ongoing debate on whether or not these kits are truly cost justified - whether they save money or are a costly convenience for the clinical staff. But I will leave that argument for another author and another day. There is another aspect of purchasing these custom kits that begs for attention. It is an aspect that can have a significant cost impact, and it is one that is all too frequently overlooked. That aspect is ongoing management of the kits – paying attention to what goes into the kits, the cost of each component, the cost of the packaging, the cost of assembly, and how these change over time.

When starting a custom kit program most organizations will spend significant time and energy on the process. They will determine what procedures are best suited based on the types of supplies needed, the standardization between clinicians, and the case volumes. They will work with the supplier to find the most cost effective products and will negotiate to assure that the cost of the final kit is reasonable. But what happens after that? Components change, kits are added, prices are modified, practices change. And all this typically happens with little or no attention to the overall cost of the kit program.

Can this be costly? Here are some real life examples of things we have found at several different hospitals.

• A hospital used a custom sheet pack. The pack consisted of one sterile draping sheet. The cost of the pack was $21. The same sheet was commercially available for $8.

• A hospital used an anesthesia procedure kit. The kit included an anesthesia mask. This mask could not be used with all patients so approximately 20% of the masks were discarded.

• A hospital purchased newborn kits. These kits came packaged in a patient’s belongings bag. The unit charge for these bags in the kit was $3.21. The same bags were purchased for use in the rest of the hospital for $.29 each.

• Another anesthesia kit was a real eye-opener. The kit consisted of eight items. The unit cost for those items as presented by the supplier was $10.43 yet the charge for the assembled kit was $27.18. Subsequent investigation found that the components could be purchased separately for even less than the $10.43.

Yes, if attention is not paid custom sterile kits and custom procedure kits can be (or become) very costly. Managing these custom kits can help to minimize the extra cost and potentially make them (or keep them) an honest value for the organization. These steps will help you in your management endeavor.

1. Use the 100% rule. Only put items into a kit that will be used 100% of the time in 100% of the cases. Do not tolerate waste.

2. Never put sized items in the kits. This is a part of the 100% rule. One hospital put size 7½ surgeon’s gloves in every kit. They admitted that using a size 7½ glove was not a prerequisite for credentialing as a surgeon.

3. Never build kits for an individual practitioner. Only include those items that all users will agree to use.

4. Review the cost of each individual component to see if it is consistent with the cost of that item if bought separately. Frequently you can save significant cost by removing one high cost item that is more expensive in the kit than purchased individually. Beware that suppliers can be reluctant to provide a detailed item cost. However, if pushed they will produce it.

5. Review the overall cost of the kit in relation to the cost of the components. Like the anesthesia kit example above, you may find the cost out of balance.

6. Do not use a custom kit when an off-the-shelf product is available. Off-the-shelf kits are often less expensive than the individual components and almost always less expensive than a custom kit.

7. Whenever a change is requested, review the whole kit. Generally if something new is going in, something old should come out.

8. Periodically review all the components to see if a less costly alternative for any of them is available.

9. Periodically review the overall cost of the program to determine if it should be insourced. While this may not be feasible for the sterile trays, it may be for the non-sterile procedure kits.

Trying to eliminate custom trays and kits can be a very unpopular undertaking. However, right-sizing them, eliminating selected ones, and assuring that they are reasonably priced with the right components is a much less hazardous process. Save some money today. Pay attention to the kits. HPN

David S. Kaczmarek, FDPHM, FAHRMM, is Vice President of The McFaul & Lyons Group, where he is responsible for all consulting and contract management operations. Kaczmarek has more than 25 years experience in healthcare administration and materials management, including director positions at several hospitals and one integrated delivery network (IDN).He is a sought after speaker and frequent contributor to various journals. He can be reached at dkaczmarek@mcfaullyons.com.

 

May
2005