It is well known that medical costs in the United States are among the highest in the world; in fact, according to Bloomberg, only two countries are more expensive than the U.S., Switzerland and Norway. This explains why community health centers (CHC's) are becoming so popular as people seek ways to obtain treatment at a lower price.
When analyzing the reasons behind the high cost of medical treatment, it becomes apparent that a major cause is the waste that occurs at all levels of healthcare from local community health centers, to skilled nursing and rehab facilities, to major hospitals and healthcare networks.
Reasons for Medical Waste
The Harvard Business Review estimated that 34 percent of healthcare spending is wasted, costing the nation $1 trillion per year. Examples of medical waste include:
- Unnecessary procedures: Instances include the ordering of expensive scans and tests that are not necessarily the best or most cost-effective solutions.
- Inappropriate treatment: Practices such as overmedication, prescribing antibiotics for conditions that don't need antibiotics and high-cost, low-value procedures.
- Overpriced drugs and supplies: Suppliers charging excessive prices.
Controlling Medical Supply Waste in Community Health Centers
One of the largest issues confronting all of healthcare, including community health centers, is controlling supply chain costs, in particular, the costs of medical supplies. One of the most impactful things that a CHC can do is to control the waste associated costs of those supplies.
CHC's have many options to reduce medical supply waste, including:
- Reducing storage space: Space is expensive, therefore, employing Just-in-Time (JIT) deliveries of smaller volumes can reduce the amount of storage space needed, resulting in lower costs for space.
- Reducing inventory costs: Determine formularies with par values for each supply type and reduce inventory by standardizing on specific items for all the different areas of use.
- Utilize automated reports: Set up automated managerial reports that monitor patient per day costs, inventory levels, medical supplies usage and expenditure.
How Value-Adding Solutions Can Help Reduce Waste Associated Costs
The magnitude of medical waste underlines the necessity for community health centers to manage medical supply costs. This is why Concordance Healthcare Solutions developed a suite of value-adding programs designed to help administrators manage and control medical supply waste. These include:
- PPD Program: Establishes a fixed price per patient per day.
- uCommand®: An online ordering solution that permits medical staff to place patient-specific orders, incorporates formulary control and provides management approval features. Short delivery times and the ability to deliver supplies direct to where they are needed reduces inventory constraints.
- BeCompliant: This managerial tool helps administrators monitor daily and month-to-date spend and track patient per day costs. Its tracking features provide the ability to monitor spending trends, identify over-expenditure and provide early warning of potential over-expenditure.
To find out more about controlling your medical supply waste, contact us for a demonstration of how these innovative solutions can help.