Implementing an approach that reduces the complexity of product sourcing, lessens the administrative workload for medical supplies procurement and serves to reduce product costs through standardization. As enticing as it may be to allow individual healthcare personnel to choose the particular products they would like to use for their patients, it may be more cost effective to standardize by narrowing the focus and utilizing fewer product options.
Product Standardization vs Product Proliferation
Standardizing a range of products allows hospice to work with suppliers to obtain better prices, maintain the appropriate number of products on hand and provide the same high quality of care to each patient. While each hospice clinician and doctor develops particular preferences for different products, the proliferation of products brought about by such an approach can be expensive. It also limits specific purchase quantities and creates potential inventory management issues. Of course, if a specific product offers unique benefits, it should be considered as an exception. Other benefits of product standardization over proliferation include:
- Lower unit costs
- Consistency of care
- Facilitated regular deliveries
- Decreased number of vendors
- Reduced administrative workload
- Simplified inventory management
- Reduced need for staff cross training
Reducing Hospice Care Costs via Established Formularies
The nature of hospice reimbursement means it's essential that supply costs are carefully controlled while ensuring quality products. One of the most effective methods of achieving this is through customized product formularies which:
- Reduce the number of different products on hand
- Provide consistency of care
- Limit waste
GPO Membership
Another way of reducing costs is to partner with a group purchasing organization (GPO) to negotiate reduced supply costs from suppliers. The practical benefits of standardization and working through a GPO include:
- Fewer suppliers
- Lower medical supply costs
- Better pricing for products not included in formulary
- Additional savings potential by achieving higher GPO contract compliance
Concordance Healthcare Solutions, one of the largest healthcare distributors in the country, has the buying power to ensure you obtain the products you need at the best prices. Additionally, we are focused on providing only the highest quality products while reducing the cost of patient care through a flexible and personalized methodology. Contact us to learn more.
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