Cost Management Within Hospital Supply Chain
How To Make Your Hospital Supply Chain Lean And Mean
Hospital supply chains can account for up to 50 percent of expenditure, which is why it is absolutely essential for executives in the c-suite to sit up and take notice. In order to run a successful operation, administrators need to ensure the supply chain is totally efficient.
Healthcare Global Gives Five Top Tips To Optimize Hospital Supply Chains >>>
#1. Involve physicians in supply chain discussions, especially related to physician preference items (PPIs) >>>
According to Healthcare Finance News, PPIs account for an estimated 40 percent of a typical supply budget, however they can also cause tension between administration and physician. Every year, medical device companies introduce new models of high-end, implantable devices such as pacemakers, artificial knees and spinal discs. But while the new model nearly always arrives with a higher price tag, there is often little data to suggest it is a clinical improvement over the incumbent.
One way to address this is through value analysis committees comprised of physicians, materials representatives and administration that evaluate PPI selection. If clinicians want to acquire a new PPI, they have to present evidence-based, clinically sound information suggesting the new device would provide a safer or more effective result to a committee of key decision makers.
By aligning physicians with administrators, supply chain managers and other leaders, and by taking a data-driven approach, health systems can limit the acquisition of new, costlier products to just those where data clearly shows increased value.
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#2. Make sure the entire operation is efficient, including the seemingly ‘insignificant’ costs >>>
For many providers, there are multiple opportunities to reduce costs by addressing so-called 'low-hanging fruit'. This could be as simple as replacing branded items with non-branded ones for example. Other options include ensuring that all care sites within a health system are buying identical products using the same contract. This concept of product standardization can be extended to a regional or national level via participation in a group purchasing organization. While these opportunities may not result in huge savings individually, they do in aggregate, and uncovering them isn’t resource-intensive.
#3. Optimize product utilization for cost effectiveness >>>
Optimizing product utilization can be a complicated process however it can produce big savings. Hospitals use comparative data that allows them to make decisions based on quality and cost, they can also gain an understanding of which products are top performers nationwide.
#4. Don’t underestimate energy efficiency opportunities when it comes to saving money >>>
Energy costs consume up to three percent of a hospital's total operating budget and at least 15 percent of their annual profits, reports suggest. Efficient energy use is an often-overlooked opportunity to reduce cost, increase net profits and contribute to the bottom line and is often as simple as replacing energy inefficient light bulbs.
#5. Remember to address ‘deadstock’
Second to labour costs, supplies are the largest expense for most health systems. Reducing on-hand inventory value and increasing inventory efficiency can present significant savings opportunities.
How healthcare can safeguard itself against cyberthreats
One of the most fundamental lessons from the COVID crisis is that health should always be a priority. In a similar fashion to the human body that frequently fights off viruses and foreign invaders that intend to cause it harm, the sector itself is now a prime target for another type of external threat: cyberattacks.
The figures speak for themselves: between December and January this year, hospitals in the UK were at 89% capacity, with 7,000 fewer available beds than there usually are. As the pandemic increased pressure on hospitals, clinics, and research facilities to create a treatment for patients globally, it has left the sector exposed to hackers who, like a virus, have been targeting it relentlessly and evolving their tactics.
From patient records being held ransom, to fake emails claiming to originate from the UN WHO, the NHS, or vaccine centres, through to attacks on the cold supply chain to find out the secret formula of the COVID vaccine, the healthcare industry is facing constant cyberattacks and struggling to cope. This threat is unlikely to go away anytime soon – and as such, the industry needs to take a proactive, preventative stance to stay safe in a dynamic digital world.
The responsive nature of healthcare – particularly of hospitals – means that efficiency is crucial to the industry’s standard operations. To support this, the sector has been embracing technological advancements that can improve the quality of work, enabling staff to meet pressing deadlines, and enhancing patient care. For example, the industry has been digitising records and improving its ways of working through digital means over the past few years.
This shift is critical to offer high quality patient care; yet, it also means the sector has become more dependent on IT, which can come with a risk if cybersecurity processes employed are deemed as inadequate.
Without the correct security measures in place, the desired efficiency gains realised, can be easily lost in a heartbeat. Simply put, an elementary glitch in the system can have a tremendous ripple effect on many areas, from accessing patient records and conducting scans, to maintaining physical security and protecting the intellectual property of experimental treatment development.
To prevent this, healthcare organisations need to ensure they’re considering cybersecurity as part of their overall digital transformation strategy – and setting the right foundations to create a culture where safety goes hand in hand with patient care.
Before implementing cybersecurity process, healthcare organisations need to assess the potential risks they face. Depending on how much confidential data the trust has, where it is stored, who has access to it and via which means, the cybersecurity strategy and associated solutions will change.
It’s fair to say that a medical device start-up where all employees have a corporate-sanctioned laptop and access data via a VPN will have radically different needs to a large hospital with hundreds of frontline workers connecting to the hospital’s Wi-Fi using their personal device.
These requirements will pale by comparison to a global pharmaceutical giant with offices in multiple locations, a large R&D department researching new treatments for complex diseases and a fully integrated supply chain. Considering the existing setup and what the organisations is looking to achieve with its digital transformation strategy will therefore have an immediate impact on the cybersecurity strategy.
Despite this, there are fundamentals that any organisation should implement:
Review and test your back-up policy to ensure it is thorough and sufficient – By checking that the organisation’s back-up is running smoothly, IT teams can limit any risks of disruption in the midst of an incident and of losing data permanently.
In our recent State of Email Security report, we found that six out of ten organisations have been victims of ransomware in 2020. As a result, afflicted organisations have lost an average of six days to downtime. One third of organisations even admitted that they failed to get their data back, despite paying the ransom. In the healthcare industry, this could mean losing valuable patient records or data related to new treatments – two areas the sector cannot afford to be cavalier about.
Conduct due diligence across the organisation’s supply chain – Healthcare organisations should review their ways of working with partners, providers and regulatory institutions they work with in order to prevent any weak link in their cybersecurity chain. Without this due diligence, organisations leave themselves exposed to the risks of third party-led incidents.
Roll out mandatory cybersecurity awareness training - Healthcare organisations shouldn’t neglect the training and awareness of their entire staff – including frontline workers who may not access the corporate network on a regular basis. According to our State of Email Security report, only one fifth of organisations carry out ongoing cyber awareness training.
This suggests it is not widely considered as a fundamental part of most organisations cyber-resilience strategy, despite the fact many employees rely on their organisation’s corporate network to work. By providing systematic training, healthcare organisations can help workers at all levels better understand the current cyberthreats they face, how they could impact their organisation, the role they play in defending the networks, and develop consistent, good cybersecurity hygiene habits to limit the risks of incidents.
Consider a degree of separation – Information and Operational Technology (IT and OT) networks should be separated.
Although mutually supported and reliance on each other, employees shouldn’t be accessing one via the other. This should be complemented by a considered tried and tested contingency and resiliency plan that allows crucial services to function unabated should there be a compromise. Similarly, admin terminals should not have internet access to afford a degree of hardening and protection for these critical accounts.
As the sector becomes a common target for fraudulent and malicious activity, putting cybersecurity at the core of the organisation’s operations is critical. It will help limit the risks of disruption due to cyberattacks, reduce time spent by the cybersecurity team to resolve easily avoidable errors, and ensure that institutions can deliver patient care, safe in the knowledge that their networks are safe.
Fighting future threats
With technology continuing to change the face of healthcare, the surface area and vectors available for attacks by malicious actors is constantly increasing. With the introduction of apps, networked monitoring devices, and a need for communication, the attack vector is ever expanding, a trend that needs to be monitored and secured against.
To prevent any damage to patients, staff, or the organisation they are responsible for, healthcare leaders must put security front and centre of their digital transformation strategy. Only then can the sector harness the full benefits of technology. Doing this should include implementing cybersecurity awareness training to challenge misconceptions around security, encourage conversation, and to ensure employee knowledge of the security basics and threats faced.
This ultimately allows healthcare organisations to do what they do best: provide the highest standard of patient care, safe in the knowledge that their operations, patients, and data are safe.