In today’s value-based reimbursement world, an effective strategy for using health care supply chain management to produce better financial, clinical and operational results is clinical product and stock keeping unit (SKU) standardization. By lowering product variation and reducing SKUs, health systems can improve care, increase operational efficiency and save money at the same time.

How Clinical Product Standardization Drives Supply Chain ValueClinical product and SKU standardization can accomplish those three objectives for health systems in at least five different ways:

  • Clinical product variation threatens both caregiver efficiency and patient safety because of differences in quality and utilization processes. SKU reduction and product standardization improve patient care by reducing opportunities for human and clinical error.
  • Consistency of care can lead to operational efficiency. Standardization streamlines product application and speeds workflow efficiency because caregivers are not required to learn new processes for different clinical products. They can focus on patient care as the use of the same products becomes routine.
  • SKU standardization across non-acute care settings in an integrated health care system better positions the entire provider organization for success. Under value-based care models, health systems reimbursement increasingly depends upon patients’ overall health outcomes, which can be largely determined by the medical care they receive outside the acute-care setting.
  • Clinical product and SKU standardization is a valuable tool to drive efficiency, reduce costs and improve compliance in supply chain management.
  • Limiting clinical product and SKU variation can help combat employee decision fatigue by trimming down or eliminating the amount of choices management makes each day, preserving employee willpower for more critical clinical and business decisions.

To reap the clinical, financial and operational benefits described above, health systems should take the following three steps:

1. Implement a supply chain analytics solution

To reduce product variability and SKUs, a health system first needs to identify variations that unnecessarily drive up costs and put patient care at risk. They need visibility into their health care supply chain purchasing data, and that means implementing a supply chain analytics solution. Applying analytics to the supply chain involves collecting, aggregating and storing product purchasing data. Using data to help identify, categorize and classify clinical items, health system supply chain administrators can get insights on their organizations’ spending and utilization behaviors and can use those insights to improve how they make decisions about clinical product acceptability, quality and price. By accumulating spend and use information and looking across different product sets, administrators can maximize supply contract compliance, limit SKUs and generate cost-savings.

2. Engage all stakeholders in the supply chain process

Health system leaders know that many doctors may be uncomfortable foregoing past practice for something new. Engaging senior leadership, practice management and clinicians in SKU standardization is crucial to ensuring a successful supply chain transformation. Involving clinical and administrative stakeholders in the value-appraisal process from the beginning ensures that a health system selects the most appropriate SKUs as product standards. Health systems should hold regular clinical product formulary meetings. There, practice managers and clinical sourcing leadership can discuss, develop and refine the product formulary based on insights gleaned from the supply chain analytics making the best possible clinical and business decisions for their organizations.

3. Apply product and SKU standardization to all settings

Health systems are assuming greater clinical and financial risk for patients along their entire continuum of care. That’s why many health systems are expanding their footprint in ambulatory and other non-acute settings. That reach gives them more control over the quality of care being delivered outside of their four walls. Ensuring physicians and other clinicians treat patients with the same standard, high-quality clinical products is essential to improving patient safety and generating operating efficiencies. Consequently, health systems should apply their product and SKU standardization process in settings over which they have control. Supply chain management systems in those other settings should be integrated into the health system’s supply chain analytics program. That extends health system’s visibility into supply chain decisions being made at the non-acute level and ensures compliance with product and SKU standardization decisions being made at the system-wide level.

By taking these three steps, health systems can reduce clinical product variations and SKUs, improve the quality and safety of patient care, eliminate costly waste from the supply chain process and enhance compliance with best supply chain practices.

Related: Learn about McKesson’s medical supply and equipment solutions for health systems

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