For physician practices seeking to reduce their operating costs, taking a look at medical supply ordering practices is critical. Practices can use technology to automate their medical supply management process and eliminate manual inefficiencies that unnecessarily inflate the bottom half of their balance sheets.
Four Ways Technology Can Improve Medical Supply Management
The supply chain management process has four basic parts. Automating each part with technology solutions can make the entire medical supply inventory process more effective and efficient for physician practices seeking to save costs in the new value-based care world.
1. Automate medical supply assessment
The first step in the supply chain management process is assessment. That’s knowing what’s on a practice’s shelves and what the practice needs to care for patients. For most practices, that process is manual and unorganized. It’s a nurse walking around with a pad and pencil writing things down as a list. It’s a doctor using the last pair of latex gloves and putting the empty box on the front desk. It’s not knowing what’s needed, how many are needed and where to get what’s needed.
Medical supply management technologies like barcoding and scanners can automate each of those three decisions for a physician’s practice. They know what items are needed. They know how much of each item should be on hand at any one point in time. And they know where a practice can get the items when it needs them and in the amount needed. Not only does that take time out of the supply chain process, it improves accuracy and reduces errors like buying too much of one thing and not enough of another. That also has a direct impact on quality and safety of patient care.
2. Consolidate medical supply procurement
The second step in the supply chain management process is procurement. That’s actually going out and getting the medical and office supplies identified and tracked by the assessment. Rather than calling multiple vendors or logging on to different websites looking for what a practice needs, technology automates and streamlines that function. I’m referring to a single portal through which a practice orders most of its medical-surgical supplies, lab supplies and office supplies. There always will be a one-off item that must be handled outside of the single portal, but that should be the exception. A practice should buy 90 percent of what it needs through a single portal technology solution.
There are other benefits to a physician practice switching to an automated, single-portal approach. This includes product standardization from buying the same item in bulk from one source, which can reduce the per item cost of the item. That approach also can reduce packaging, shipping and delivery costs. Additionally, by using an automated single-portal for medical supply ordering, a practice can manage the procurement to payment process more effectively, including setting rules for all purchases. For example, the system can send alerts and stop orders for supplies exceeding a specified dollar limit or supplies that fall outside of a pre-approved product formulary.
3. Manage medical supply receiving online
The third step in the supply chain management process is receiving. That’s making sure a practice received the supplies, received the right supplies, received the right amount of supplies and received them for the right price. That can be done manually by checking the packaging slip against everything that’s in the box when it’s found at the front desk. Or it can be automated through technology similar to receiving order, shipping and delivery notifications and confirmations via e-mail or text messages for consumer retail purchases from an online shopping platform.
That approach lets a practice acknowledge and validate receipt of the procured items. It gives a practice an electronic record of the transaction. A practice can forward receiving information and provide invoice approval for payment to the accounting department with the click of a button rather than folding it up, putting it in an envelope and dropping it in the mail. The practice is leveraging technology to share that information with others who need it rather than picking up the phone and trying to reach multiple people.
4. Reconcile medical supply order electronically
The fourth and final step in the supply chain management process is reconciliation. Typically, the person doing the ordering is not the same person doing the paying. Invoices are sent electronically to the accounting department, which reconciles the purchase order, the shipping receipt and the invoice to ensure a practice is paying the right price for exactly what it ordered. The net result is accurate and quick payment for medical supplies. That approach also creates an electronic audit trail for purchases.
The technologies that automate all four steps—assessment, procurement, receiving and reconciliation —also should provide practices with other capabilities. Since the technologies should be accessible by mobile devices (e.g. handheld scanners, tablets and smartphones), that makes the supply chain management process more efficient by enabling practices to make purchasing decisions and track orders from any location when it’s most convenient. The technologies should also be able to generate standard and customized financial reports based on data collected at each point in the process. The reports should track and analyze spending to flag problem areas or opportunities for savings.
Evaluating the Technology Needs of a Physician Practice
How much technology a physician practice needs to automate its medical supply management process generally should be based on supply volume. Small practices with five purchase orders a week, for example, should be fine with a small solution for a monthly subscription fee. Large practices with hundreds of purchase orders a week, though, likely would need a larger solution that would require a significant capital outlay. Functionality, features and applications should match the purchase volume.
Regardless, the return on investment will be there. It will be there from making the supply chain process more efficient and effective. And it will be there from reducing the time clinicians spend on managing their medical supplies and increasing the time they spend on patient care.
Related: Learn about McKesson’s medical supply solutions for physician practices.