By: Oscar L. Orias
Lets the Celebrations Begin
The Texas Medical Center along with other hospitals around the country are celebrating Supply-Chain Management Week (Oct 4-10). This was a week created by AHRMM (Association for Health Care Resources and Materials Management) as a way to congratulate the tireless efforts of material managers and their staff. In a time of shrinking budgets, growing demand, and government intervention in medical industry hospitals are turning to their supply-chain for cost savings and efficiency solutions. Material costs are only second to labor costs in the hospital so controlling the flow of materials and bringing down costs has become imperative. The task is not any easy one for supply-chain managers and their staff. Hospital departments traditionally are very silo and tend not to cooperate with other departments and the corporate level.
Importance of Supply-Chain
The advent of material management has made hospitals much more centralized and has lowered the cost of buy goods. Now medical facilities have a whole department dedicated to getting contracts, purchasing, and monitoring supplies. In a complex hospital environment that can be very difficult to do. Another variable that adds to the complexity of a hospital is that they can’t reject customers that need treatment. Any other industry can afford to exclude a segment of the market if it feels it the cost and resources will outweigh the profit. Hospitals’ don’t have that luxury since countless lives depends how well it delivers services. For example; hospitals routinely loses money on Medicare and Medicaid patients since the government has very strict sets of payments. If a treatment cost more than what the government says it will pay then it is up to the hospital has to absorb the cost. This is one of the reasons why supply-chain management has gotten more attention over the last decade.
Even with the extra attention the tiring job of material management staff doesn’t get easier. The supply-chain is continously under pressure to have materials always on-hand, increase the fill rate, lower costs on supplies, expedite orders quickly if needed, resolve legal matters, and work with staff to solve materials issues. As one director of a hospital put it, “Job security isn’t guaranteed. You are only as good as your last fill rate.” This puts the stress on the value-chain to perform at the highest level at all times and to do it on a shrinking budget.
GPOs and distributors like Owens & Minor also share in the stresses of the medical supply-chain. They work hard to hammer contracts with manufacturers, bring down material cost, match the right orders with the facilities, quickly resolve any backorder issues, expediate supplies quickly if needed, and work with medical facilities on improving its material management. It takes the combined effort of many different people and companies to make sure that resources get to medical staff in a timely manner and those hospitals get the necessary items at the lowest price.
Tipping My Hat Off to Them
Doctors, nurses, and other practitioners work endlessly to deliver the best care to their patients but there is another group of administrators also doing the same. There job may not be glamorous nor visible but they make sure that doctors get all the resource they need to take care of you. Supply-chain management serve as bridges that makes sure the needs and goals of clincians and the hospital are both aligned and met. In a time of economic uncertainty especially in the medical industry they are the first and best line of defense in delivering effective, affordable care for all. Next time you are in a hospital and you run into an employee with a badge that says Materials Management take a second to thank them and if you can tip your hat off to them, I know I will.
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