Laboratory services are imperative to the healthcare ecosystem. Laboratory procedures aid clinicians in diagnosing, managing, and treating patients—yet when an organization does not have successful laboratory supply chain strategies, patient care can become delayed, lost revenue can occur, and there can be extra burdens and stress on staff to keep up with demand.
Healthcare Purchasing News spoke with two industry experts in this space. Kevin Dunwoody, vice president laboratory national field sales, Medline, and Barbara Strain, MA, SM (ASCP), CVAHP, principal, Barbara Strain Consulting LLC, formerly director of Value Management at University of Virginia Health System, and current member of HPN’s Editorial Advisory Board.
When asked how lab supply strategies differ from other supply strategies, Dunwoody said, “For maximum lab efficiency and effectiveness, lab supply strategies should closely mirror other service line supply strategies in healthcare settings. Healthcare settings—including clinical labs—have processes and protocols that are very well defined. Lab team members know exactly what they need to run tests and which lab supplies need to be readily available. Most lab supply strategies could—and should—align with the strategies for everything purchased in volume throughout that hospital or healthcare system—whether it’s office supplies, maintenance repair and operations (MRO), or IT.”
He continued, “Minimally, healthcare and lab supply strategies should:
- Effectively standardize your product list to the degree possible
- Rationalize and consolidate a SKU list to decrease variability
- Deliver the right mix and quantity of products to match your demand profile and available storage
- Make shipments as full and infrequent as possible to minimize workflow disruption.”
Further, Dunwoody added, “At the end of the day, while accounting for the variety of required hazardous or temperature-controlled product storage solutions that address specific lab product attributes, there is not much justification for running a clinical lab supply chain that is not in sync with other supply chains in a hospital or healthcare setting.”
“Hospitals and health systems operate more efficiently and effectively when they align lab supply chain strategies with other supply strategies within their hospitals or networks,” he said.
Dunwoody also commented on the biggest concern today when it comes to lab supplies. He said, “One of the biggest concerns for labs today is that many equipment and instrumentation manufacturers are requiring specific consumables, reagents, chemicals, etc. brands to be used with their products without demonstrating significant improvements to outcomes. This makes it more challenging for health systems and their labs to realize available efficiencies, particularly across service lines.”
“Labs are also in a unique and sometimes challenging position as they often cannot use a sub or move to another item if presented with a national backorder issue,” he continued. “Unlike medsurg, commodities and consumables where a robust auto sub program can help end users navigate through supply chain issues and backorders, labs often need to validate and update certain SOPs when looking at a new item. This only enforces the need for and importance of upstream data and proactive communication on inventory and supplies to the lab buyers and end users. Working together to plan and prepare for possible supply chain disruptions through data and communication will allow lab professionals more time to focus more on patient care and less on inventory management.”
Value analysis and the lab
When asked about the relationship between the laboratory and value analysis teams, Strain said, “It's an interesting relationship.” She went on to explain that there are meetings where key members of the laboratory gather and speak, for example, about new methodologies. The team generally equates this to value analysis—looking at what the value of continuing a current methodology is or adopting a new one. Then, Strain said, it stops short of all the rest of the value.
Strain added, “What can help is when there is a top-down approach, where it becomes a strategic initiative in a hospital organization to look at how the best value can be provided to patients as well as to the organization. Then it becomes more evident and easier in a way that everyone is on board, whether they are in the laboratory, radiology, imaging, or nursing so that there is a process, and that is where value analysis, along with leaders, develops programs.”
“And then these teams are formed,” Strain commented. “You have to have folks that understand enough about the laboratory or any other area in a way that makes it meaningful to everyone. Right now, I think there’s a little bit more of a trend that there are value analysis teams for the laboratory.”
Current challenges
As for the biggest challenges for those responsible for lab supplies, Medline’s Dunwoody stated, “One of the biggest challenges is that healthcare space is at a premium. You walk into most labs and they are jammed with people, products, samples moving through. Often, you won’t see cohesive storage strategy. Hospitals and health systems are looking for ways to consolidate and store products being used for the variety of lab work—chemistry, biology, pathology, etc.—without negatively impacting the workflow or the samples coming through the space. Lab leaders are constantly looking to more effectively manage consumption of lab supplies in the given space.”
“Ideally, labs should be able to map out the areas where items are being used and disposed of along with best places to store those items to optimize workflow,” he added. “But that’s easier said than done.”
As for a possible solution, Dunwoody said, “Whether it’s creating more or re-engineering lab testing space, find cost-savings or improving processes, bring in your lab teams and other stakeholders to identify what needs to be addressed and make a plan to act. Consult with distributors or business partners who have expertise in healthcare supply chain optimization, like Medline, who are committed to solving your bigger supply chain challenges with you, and can provide insight into how other clinical labs or healthcare systems have overcome similar challenges.”
Strain also added her two cents on current challenges. She said, “They [the lab] still won't get what they need when they need it.”
Strain went on to say that there are often communication issues. For example, the lab often needs certain items—like test trips or reagents—by a certain time and things just don’t show up. So much depends on the laboratory; for example, if they don’t get a result out to someone in the emergency room or the operating room in a timely manner, it can mean the difference between the patient being helped effectively and the patient getting worse, or even dying.
Strain then commented on the importance of value analysis teams in regard to the laboratory when it comes to solving challenges. She said, “Value analysis listens to managers or leaders from, say, immunology or chemistry or hematology, and what they’re really planning, and then we help to look for their GPO contracts. What issues have you had with your current supplier? Can we help intervene there and figure out what we can negotiate to help make that better?”
Speaking from personal experience, Strain added, “And we actually then brought different divisions from the same manufacturer together that were siloed in different lab divisions so that they understood that we could work together for a common contract rather than all these individuals with all these different sort of rules and guidelines and things that they wanted to do. We were very helpful in bringing a lot of different people together, including end users of the lab services as well as the manufacturers that were providing them and other parts of the lab and some physicians on some cases and things like that to talk through. We'd understand what was happening with results and what was happening in the lab and how we could come together.”
“So, there's some very good synergies for the laboratory with value analysis,” she asserted. “On the other hand, on the supply chain side, they would come in very early on with some inventory solutions and so labs can have full lean, exercises and assessments done and [learn] how to organize their supply rooms and how to do other types of inventory systems to make it easier. I remember going into one lab’s storeroom where they had things and we also had to understand what the Joint Commission and DNV and other inspection agencies’ guidelines were about putting boxes directly on the floor and things like that. So, we would get different types of shelving and different things for them so they could all be in compliance. It’s a very synergistic relationship when you put it all together.”
AI and the future
Medline’s Dunwoody then commented on what seems to be today’s million-dollar question in every sector of the healthcare industry right now: What is the deal with artificial intelligence (AI)?
“Our customers are definitely asking about AI solutions in lab supply chain to help identify and remove non-value added activities from lab processes,” he stated. “Currently, the more interesting lab AI solutions work with camera-based inputs and electronic IDs in storage areas. But, as with the rest of the healthcare industry, there are hurdles around patient privacy and security that are curbing the advancement of AI in lab supply chain at this time.”
And as for the future of this space, Dunwoody said, “Technology advancements and further investments into automation will have a big impact on the future landscape of clinical labs. Staffing shortages coupled with increased testing demands due to an aging population will continue to cause issues with time management for lab professionals. Automation and new advanced testing platforms will not only allow labs to become more efficient and streamline a lot of their processes, but it also presents exciting opportunities in the form of early detection and better care of their patient population. 70% of all medical decisions are made and based on testing done within a clinical lab setting. This means investing not only in new technology but also people and future education and awareness on the importance of a lab professional is crucial and extremely impactful to the future of healthcare.”
"In addition, real estate in health systems and hospitals is becoming too valuable to do non-revenue generating, non-value added activities,” he added. “Every inch of a hospital or health system is being used to provide better service to patients, improve patient outcomes, and operate more effectively and efficiently.”
Dunwoody concluded by saying that, “More health systems are taking these non-value added services out of expensive health system real estate and are establishing multi-use central service centers designed to provide support operations and functions. More health systems will be using or operating consolidated service centers in 5-10 years.”
