Tuesday, July 31, 2012

Healthcare's Hottest for 2012: 40 of the healthcare industry's fastest growing companies


Modern Healthcare's inaugural Healthcare's Hottest recognition program honors the fastest growing companies and organizations in the industry as measured by revenue growth. Forty companies were named to the 2012 list (below). On July 23, Modern Healthcare announced the names of the 40 companies in alphabetical order. Modern Healthcare will announce the ranked order of the 40 companies in September. 


Company nameCityStateWebsiteSectorOwnership
Adventist Health PartnersBolingbrookILwww.AdventistHealthPartners.comPhysician group practicesPrivate, Non-profit
Allscripts Healthcare Solutions, Inc.ChicagoILwww.allscripts.comSuppliersPublicly traded (for-profit)
Amerigroup CorporationVirginia BeachVAwww.amerigroup.comPayers/insurersPublicly traded (for-profit)
Beacon PartnersWeymouthMAwww.beaconpartners.comSuppliersPrivately held (for-profit)
Best Doctors, Inc.BostonMAwww.bestdoctors.comPayers/insurersPrivately held (for-profit)
BioRxCincinnatiOHwww.biorx.comSuppliersPrivately held (for-profit)
BravoSolutionChicagoILwww.BravoSolution.comSuppliersPrivately held (for-profit)
Capella HealthcareFranklinTNwww.capellahealth.comHospital/hospital systemPrivately held (for-profit)
Centerre Healthcare CorporationBrentwoodTNwww.centerrehc.comHospital/hospital systemPrivately held (for-profit)
Chindex International, Inc.BethesdaMDwww.chindex.comHospital/hospital systemPublicly traded (for-profit)
Compass HealthCrowleyLAwww.compasshealthcare.comHospital/hospital systemPrivately held (for-profit)
Cumberland Consulting GroupFranklinTNwww.cumberlandcg.comSuppliersPrivately held (for-profit)
Cumberland PharmaceuticalsNashvilleTNwww.cumberlandpharma.comSuppliersPublicly traded (for-profit)
Edifecs, Inc.BellevueWAwww.edifecs.comSuppliersPrivately held (for-profit)
Emergent Medical AssociatesManhattan BeachCAwww.ema.usPhysician group practicesPrivately held (for-profit)
ESDToledoOHwww.esdontheweb.comSuppliersPrivately held (for-profit)
Florida Cancer Specialists and Research InstituteFt MyersFLwww.flcancer.comPhysician group practicesPrivately held (for-profit)
GlobalMedScottsdaleAZwww.globalmed.comSuppliersPrivately held (for-profit)
Health Systems InternationalIndianapolisINwww.us-hsi.comSuppliersPrivately held (for-profit)
HealthfirstNew YorkNYwww.healthfirst.orgPayers/insurersPrivate, Non-profit
Hospital Housekeeping SystemsAustinTXwww.hhs1.comSuppliersPrivately held (for-profit)
IASIS HealthcareFranklinTNwww.iasishealthcare.comHospital/hospital systemPrivately held (for-profit)
Innovative Services Inc.Green BayWIwww.myinnovativeservices.comSuppliersPrivate, Non-profit
MasimoIrvineCAwww.masimo.comSuppliersPublicly traded (for-profit)
MedRisk, Inc.King of PrussiaPAwww.medrisknet.comPayers/insurersPrivately held (for-profit)
MedSynergiesIrvingTXwww.medsynergies.comSuppliersPrivately held (for-profit)
Mercy HealthBlue AshOHwww.e-mercy.comHospital/hospital systemPrivate, Non-profit
Mercy Health PhysiciansCincinnatiOHwww.e-mercy.comPhysician group practicesPrivate, Non-profit
Merge HealthcareChicagoILwww.merge.comSuppliersPublicly traded (for-profit)
Methodist Health SystemDallasTXwww.methodisthealthsystem.orgHospital/hospital systemPrivate, Non-profit
NavicureDuluthGAwww.navicure.comSuppliersPrivately held (for-profit)
NorthStar AnesthesiaArlingtonTXwww.northstaranesthesia.comPhysician group practicesPrivately held (for-profit)
Physicians Pharmacy Alliance, IncCaryNCwww.physicianspharmacyalliance.comSuppliersPrivately held (for-profit)
Pikeville Medical CenterPikevilleKYwww.pikevillehospital.orgHospital/hospital systemPrivate, Non-profit
Somnia, Inc.New RochelleNYwww.somniainc.comPhysician group practicesPrivately held (for-profit)
St. Luke's Jones Regional Medical CenterAnamosaIAwww.jonesregional.orgHospital/hospital systemPrivate, Non-profit
Summit Medical GroupBerkeley HeightsNJwww.summitmedicalgroup.comPhysician group practicesPrivately held (for-profit)
Sysmex America, Inc.MundeleinILwww.sysmex.com/usSuppliersPublicly traded (for-profit)
The Advisory Board CompanyWashingtonDCwww.advisory.comSuppliersPublicly traded (for-profit)
The Villages Health System (Villages Tri-County Medical Center, Inc.)The VillagesFLwww.cfhalliance.orgHospital/hospital systemPrivate, Non-profit




All submitted financial documentation was tabulated and analyzed by Modern Healthcare. A sample of Modern Healthcare's tabulations were independently assessed by the accounting and management consulting firm of Deloitte & Touche, a subsidiary of Deloitte LLP, which provides audit, tax, consulting, and financial advisory services to companies of all sizes including a practice dedicated to middle-market firms.


Source: modernhealthcare

Thursday, July 26, 2012

6 steps successful practice managers follow to maximize revenue


Too often, medical practice managers look at cutting costs rather than increasing revenue. Successful practice managers and administrators know that maximizing revenue is No. 1 for financial strength.

"Depending on the compensation structure of the physicians, a substantial net income may be expected in order to pay bonuses. For others, simply keeping a positive number to support the current salaries is acceptable. Either way, it is important to manage the bottom line of medical practice to verify financial expectations of the owners are being met," explains Dixon Davis, VP of practice management for AAPC, a company that trains and provides credentials in documentation and coding audits, regulatory compliance and physician practice management.

According to Davis, there are six fundamental steps to achieve financial success in running a medical practice today.

1. Maintain productivity. One of the most important elements of achieving financial success in a clinic is having productive providers. After all, higher productivity results in higher revenue. Effectively monitoring productivity helps manage the provider’s expectation of how it affects compensation and the bottom line. In addition, a manager should always be looking for ways to enhance revenue streams through creating more efficient processes and additional services.

2. Capture all charges. Once services are provided it's important that all of the charges are captured, Davis said. First, make sure every service that's performed is identified on the billing sheet or in the EHR. This means that any providers, nurses, technicians or other staff involved in providing services must properly document everything they do. Second, accurate documentation and coding of the services being performed is vital. Medical claims are paid based on procedure and diagnosis codes so they must be accurate to ensure revenue is not left on the table or is put at risk or recoupment. Third, submitting this information in a timely matter is important.

3. Verify clean information is being sent the first time. Correct insurance information, demographics and code entry is imperative for the initial submission. Incorrect information results in denials and delayed payments, which can directly impact revenue streams and increase costs. Review all processes involved with collecting this information and make it a priority to get it right the first time. This is effectively done with clearly stated processes and expectations followed up with periodic audits to identify areas of improvement.

4. Effective office collections. Being disciplined at collecting patient balances due while the patient is in the office is key. While it's an easy concept in theory, it is still not carried out well by many health providers. Co-pays, deductibles, co-insurance or past due balances are much easier to collect when the patient is in the clinic versus weeks, or months, after their visit. This requires a clear policy on what's expected, training for the office staff on how to be effective and a culture where patients are held accountable.

5. Effective collection policies and procedures. The effective work of a billing office is vital for collecting all of the money a practice is entitled to. Billing departments need to have clearly stated collection policies/processes. This includes how to work denials, following up on aging claims, how and when to collect from patients, when to send claims to collections and when to write off bad debt. Spend time identifying processes that are as simple and straight forward as possible, and then provide good education and training so that the staff knows how to be effective in their responsibilities. A billing office staff is much more effective when working within a structured process than making it up as they go or taking the path of least resistance. A manager should have set metrics that are measured and reviewed with the staff on a regular basis to maintain direction and identify areas needing correction.

6. Regular review of contracted payer rates and operational costs. Healthcare providers should review contracted payer rates periodically. This ensures they are negotiating the best rates available so they may maximize revenue opportunities. Also, it's important to maintain cost structures. After establishing a strong revenue flow, reviewing costs such as liability insurance, supplies, phone contracts and other operational expenses helps make certain you are receiving the best prices available.

Source: healthcarefinancenews

Tuesday, July 24, 2012

Healthcare leaders discuss greening the supply chain, lowering costs


During a White House Council on Environmental Quality (CEQ) conversation on Tuesday, leaders in healthcare and policy discussed the Healthier Hospitals Initiative (HHI) to reduce the environmental footprint of hospitals, lower costs and improve overall patient health by including sustainability efforts and initiatives into their business models.

The Healthier Hospitals Initiative (HHI) is a national campaign to implement a new approach to improving environmental health and sustainability in the healthcare sector. Eleven of the largest U.S. health systems, comprising approximately 500 hospitals with more than $20 billion in purchasing power, worked with Health Care Without Harm (HCWH), the Center for Health Design and Practice Greenhealth to create HHI as a guide for hospitals to improve sustainability.

Among those at Tuesday’s forum, “Greening America’s Hospitals: A White House Discussion on the Healthcare Industry,” were representatives from nationwide healthcare group purchasing organizations (GPOs). They discussed the critical role of the healthcare supply chain in introducing these environmentally sustainable designs.

“I thought it was very productive discussion, and it’s true that the supply chain is an important part of greening the healthcare system,” said Healthcare Supply Chain Association (HSCA) President Curtis Rooney. “What people choose to buy matters and if you can get green products you can really move the market.”

Rooney noted that last year HSCA endorsed the Practice Greenhealth “Standardized Environmental Questions for Medical Products,” which has been used to guide the identification, selection and procurement of environmentally preferable medical products. The tool is a significant part of Practice Greenhealth’s “Greening the Supply Chain Initiative," which the organization launched in 2011 to provide a common set of tools for purchasers, suppliers and manufacturers to ensure that environmentally preferable products are available, cost competitive and of comparable quality.

 “It’s primarily important to make sure the patient gets the right and safest product, but this initiative can also save money by aggravating the purchasing. It creates the ability for the prices to be driven down so that these environmentally preferred products can be affordable,” Rooney said.

Jennifer Waddell, senior clinical manager at Novation, a healthcare supply chain expertise and contracting company, said Tuesday’s discussion “brought to life an issue that is very important.”

“We support legislation around full disclosure of products in technology and using non-toxic products in medical devices,” she said. “We also have to do this in a cost effective manner. A lot of people think environmentally friendly products tend to be more expensive, but with a lot of the products in the medical device market there ends up actually being a savings when you move to some of these measures. Also, energy conservation helps hospitals save money in the long run.”

Source: healthcarefinancenews

Thursday, July 19, 2012

Drought may play havoc with supply chain budgets


As widespread drought annihilates crops and sends prices increasingly higher, supply chain managers at healthcare facilities are no doubt eyeing their budgets.

The U.S. Department of Agriculture is calling the country’s drought “the most serious situation we’ve had in probably 25 years,” said Secretary of Agriculture Tom Vilsack during a press briefing on Wednesday.

Seventy-eight percent of the corn crop and 77 percent of the soybean crop are in drought areas, Vilsack said. More than 1,200 counties in more than 25 states have been designated disaster areas.

The drought has caused a spike in crop prices, particularly for corn and soybeans, with a 38 percent increase for corn since June 1 and a 24 percent increase for soybeans, Vilsack said.

The pricing increases the country is seeing right now, said Mike Zarembski, a senior analyst at OptionsExpress by Charles Schwab, are the result of a miscalculation. Farmers planted near-record acreage in corn and soybeans so everyone was expecting a record yield this year.

“The prices were reflecting ample supplies going in this year so I think a lot of people got caught short, expecting to be able to obtain supplies much cheaper as the harvest went along,” said Zarembski. “Unfortunately, this drought hit starting six weeks, eight weeks ago here in the Midwest and it has completely devastated – especially the corn crop is really going to be hard hit this year.”

Anticipating tighter supplies means “(I)t’s going to be higher prices across the board for really any kind of food stocks that involve the grains or the energies as well,” he said.

But Amanda Hamilton thinks it is worry that’s driving the market right now with no solid reason for it. “We have been watching what’s happening and to be quite honest nothing has happened yet,” said Hamilton, the director of sourcing operations at group purchasing organization, Novation.

“Specifically with corn, I think there’s a rise only because of the fear factor but not because anything substantially happened,” she said. “We have about another 30 days or so. I mean the outlook isn’t good if it doesn’t rain.”

“One of my suppliers told us the other day, ‘Just pray for rain,’” she said. “If rain comes we’ll be sitting in a good spot.”

But given the National Weather Service’s extended outlook of continued drought, Hamilton says it is wise not to panic but to begin thinking about how to manage supply budgets. “It’s hard to tell right now what the percentage of increase is going to be as far as price goes,” she said since what the yield will be is still unknown. “I wouldn’t feel comfortable giving them any kind of firm number, however I will say find room. Find room for next year of comfort to be able to take from other areas to move over to this area.”

Source: healthcarefinancenews

Tuesday, July 17, 2012

The Effects of ObamaCare on Supply Chain Management


The Supreme Court upheld a mandate for Barack Obama’s signature health care law for individual insurance referred to as ObamaCare. While U.S. citizens are as divided as the Supreme Court justices (who voted 5-4 in favor of upholding the mandate) in their views of ObamaCare, the fact remains that its validity will greatly affect the economy, including supply chain.

Most directly, healthcare supply chain management will be impacted. Quoted in Forbes, Joe Ruggieri, a trading analyst at International Strategies & Investing, said the law had positive implications for healthcare supply chain. He said that although many are upset with the decision, the clear-cut logistics of the law are predictable and better from a financial standpoint for forecasting revenues brought in by healthcare services.

With more people given the ability to acquire healthcare, the demand for services, supplies and products will increase tremendously. This means an increase in production for those businesses catering to healthcare organizations – from prescription medications to latex gloves. ObamaCare also means cuts in Medicare and Medicaid as well over the next 10 years and a 2.3% excise tax on drugs and medical devices in 2014.

The law will affect many other industries. As reported in The Wall Street journal, UPS has already begun to reap the benefits of citizens with healthcare – they signed a deal with a medical device company to ship up to 4,000 insulin pumps daily to patients. Additionally, FedEx has announced a new temperature-sensitive packaging that will boost its supply chain revenues internationally, in Europe, the Middle East and Africa.

It is of great benefit for supply chain managers to be aware of the implications this law presents to prepare for changes in production levels. That is, at least until Inauguration Day (Mitt Romney has said he will disband the law on his first day in office, if elected), which may bring change to healthcare and supply chain management.

Source: supplychaindigital

Friday, July 13, 2012

CEOs, CFOs Should Oversee Risk Management


Organizational risks are increasingly on the radar of top executives, and it's chief financial officers and CEOs - not chief risk officers - who should ultimately bear the responsibility for risk management, according to a survey released Wednesday.

"Aftershock: Adjusting to the new world of risk management," published by Forbes Insights in association with Deloitte, found that 26% of executives think the main responsibility for overall risk management belongs to the chief executive officer, with 23% saying the responsibility lies with the CFO or treasurer. The chief risk officer or head of risk came in third place, at 19%.

Mark Carey, a partner at Deloitte & Touche LLP and leader of the governance and risk strategies practice, says he was not surprised that the CEO would be seen as the party ultimately responsible for risk. "There is a body of thought that at the end of the day the CEO is responsible - and that the CFO or CRO is there to support the CEO," he says. He observes, however, that there are more CEOs and CFOs than chief risk officers in the nonfinancial industries that were surveyed.

What most surprised Carey was the finding that financial risk would be the most volatile area of risk over the next three years. Sixty-six percent of respondents indicated as such. "Given everything we've gone through over the last four or five years, to have the majority of respondents say they think financial risk would still be the most volatile area was very surprising," he says. "I would have expected no change, or less volatile."

The risks companies are experiencing as part of the global economic crisis, financial and otherwise, are proving to be a catalyst for change. Fifty-five percent of executives reported their organization will revamp their risk-management approach within the next 12 months, and 91% of executives said they plan to do so in some form in the next three years.

Despite heightened attention to risk management, though, less than a quarter of the surveyed executives said their organization monitored risks continuously, as opposed to just periodically, a result that surprised Carey. Reputational and supply-chain risk were even less likely than other business risks to be monitored continuously.

When the executives were asked how they planned to revise their risk-management approaches, 52% said they would elevate the profile of risk management throughout their organization, 39% would reorganize risk-management processes, 37% would provide additional staff training, 31% would incorporate new technology, and 28% would integrate risk into strategic planning.

Asked by what degree their organization's approach to managing and responding to risk has changed over the past three years because of financial-market volatility, 39% of the executives said it has changed significantly, 40% said somewhat, and 17% said not at all.

The report surveyed 192 U.S. executives from consumer and industrial products, life sciences, health care, technology, telecommunications, and media companies. The respondents came from companies with at least $1 billion in revenue, and fully half of the companies had revenues of greater than $10 billion. Sixty-five of the survey respondents had the title of director or vice president; 49, CEO; and 26, CFO, treasurer, or controller.

Source: CFO.com

Wednesday, July 11, 2012

FDA releases proposed UDI rule; reaction generally positive


The Food and Drug Administration (FDA) released Tuesday a proposed rule that most medical devices distributed in the United States carry a unique device identifier (UDI).

A UDI is a unique numeric or alphanumeric code that includes a device identifier, which is specific to a device model, and a production identifier, which includes the current production information for that specific device, such as the lot or batch number, the serial number and/or expiration date.

Congress passed legislation in 2007 directing the FDA to develop regulations establishing a UDI system for medical devices.

The system has the potential to improve the quality of information in medical device adverse event reports, which will help the FDA identify product problems more quickly, better target recalls and improve patient safety, according to the proposed rule.

The FDA is also creating a database that will include a standard set of basic identifying elements for each UDI, and will make most of it available to the public so that users of a medical device can easily look up information about the device. The UDI does not indicate, and FDA’s database will not contain, any information about who uses a device, including personal privacy information.

When fully implemented, the UDI system may:

  • Allow more accurate reporting, reviewing and analyzing of adverse event reports so that problem devices can be identified and corrected more quickly.
  • Reduce medical errors by enabling health care professionals and others to more rapidly and precisely identify a device and obtain important information concerning the characteristics of the device.
  • Enhance analysis of devices on the market by providing a standard and clear way to document device use in electronic health records, clinical information systems, claim data sources and registries. A more robust postmarket surveillance system can also be leveraged to support premarket approval or clearance of new devices and new uses of currently marketed devices.
  • Provide a standardized identifier that will allow manufacturers, distributors and healthcare facilities to more effectively manage medical device recalls.
  • Provide a foundation for a global, secure distribution chain, helping to address counterfeiting and diversion and preparation for medical emergencies.
  • Lead to the development of a medical device identification system that is recognized around the world.

Industry reaction to the proposed rule has generarly been positive.

“A robust UDI system will significantly enhance product identification, improve the device recall process and ensure the integrity of the product throughout the transportation process, and most importantly, advance and improve patient safety,” said Dan Sweeney, senior vice president of information and data services at Irving, Texas-based supply contracting firm Novation, in a written statement. “A UDI system also has the potential to generate significant savings for the healthcare industry through improved efficiencies and automated processes.”

Joe Pleasant, CIO of Charlotte, N.C.-based Premier healthcare alliance, told Healthcare Finance News that their members are excited that the proposed rule has been issued but most are disappointed by the seven-year timeframe for implementation.

“I think it’s too long,” said Pleasant. “We’ve been talking about this for five years.”

“I would say while I’ve been very disappointed in FDA taking as long as they have to make the ruling available, they have done a lot in last 3-5 years to talk to manufacturers, distributors and hospitals about what is needed… They should be applauded for the fact that they have done enough pilots and testing,” he said.

Pleasant expects the introduction of the UDI system to improve patient safety, noting it will make it easier to recall high risk products, identify patients who are using recalled products and compile electronic medical records for clinicians to know what devices patients have used or are currently using.

“It will also help reduce errors,” said Pleasant.

Additionally, the UDI system will create supply chain efficiencies, he said, adding, “If (providers) can depend upon the coding on the package, they can begin to eliminate internal barcoding and labeling and the costs associated with them.”

Source: healthcarefinancenews

Thursday, July 5, 2012

Healthcare CEOs develop checklist to save money, improve quality


In a collaborative effort between CEOs and senior executives from 11 leading hospitals and health systems across the country, a comprehensive checklist to promote high-value healthcare at reduced costs has recently been developed.

The CEO Checklist for High-Value Health Care, which was released Tuesday, includes 10 strategies proven effective and essential to improve healthcare quality, reducing waste and lowering costs. The checklist emerges from a discussion paper from the Institute of Medicine (IOM) on excess costs in the U.S. healthcare system.

The authors of the checklist represent CEOs and senior executives from the following institutions: Cincinnati Children’s Hospital Medical Center, Cleveland Clinic, Denver Health, Geisinger Health System, Hospital Corporation of America, Intermountain Healthcare, Kaiser Permanente, Partners HealthCare, ThedaCare Center for Healthcare Value, Veterans Health Administration and Virginia Mason Health System.

“I think we have a crisis in healthcare right now and we have an opportunity to make a difference. The checklist was an effort to identify the best practices, have better outcomes and make it available to the executives at the highest level,” said Uma Kotagal, senior vice president of quality, safety and transformation at Cincinnati Children’s Hospital Medical Center. Kotagal has also worked extensively with the CEO Checklist. “The checklist can be part of the conversation with an executive team, and it would be a simple way to get started since it can sometimes be overwhelming to say ‘let’s make healthcare better.’ The checklist also gives examples of how this can be done.”

The strategies outlined in the checklist can help save lives and money, said Kotagal. The list describes a comprehensive approach to promoting high-value healthcare, and can serve as a blueprint for other hospital executives when considering their own efforts to improve the value of care delivered. Checklist items include:

• Senior leadership that is committed, visible and determined;
• Institutional culture of continuous improvement and real-time learning;
• Comprehensive IT systems for integrated, streamlined and safe care;
• Evidence-based care to ensure the best care is delivered every time;
• Optimized resource utilization to reduce waste;
• Integrated care delivered in the setting most appropriate for the patient’s needs;
• Patient-clinician collaboration on care plans;
• Targeted resources for the sickest patients;
• Safeguards to reduce injury and infection; and
• Internal transparency on performance, outcomes and cost.

“Everyone is aware that medical costs are rising and with the baby boomer age getting older, people are wondering how we are going to afford care,” said Robert Wyllie, chief medical operating officer at Cleveland Clinic. “We could do things more efficiently and that led us to think about how we can be more efficient and improve care. Everyone doing it the same way allows us to spotlight if there are problems and how we can fix them.”

To demonstrate the potential of each of the 10 checklist items, the list includes supporting case material describing the experiences of authoring institutions already working to implement these strategies. For example, at Cincinnati Children’s Hospital Medical Center smoothing patient flow through the ICU has avoided $100 million in capital costs and reduced delays due to bed availability. Another example is at Cleveland Clinic, where internal transparency on quality spurred a 40 percent reduction in central line-associated blood stream infections (CLABSIs) in the ICU, with $30,000 saved per avoided infection.

“I think there is a sense of urgency and accountability with all of these issues. The checklist makes it easier for healthcare executives to get started,” said Kotagal. “I think most organizations are already thinking about it. Executives can crosscheck with this list and it helps them identify where they are working well and where they could work better.”

Source: healthcarefinancenews

Tuesday, July 3, 2012

6 opportunities to keep hospital supply chain in line


Texas Children's Hospital in Houston opened its Texas Children's Hospital Pavilion for Women after recently expanding a new West Campus in an effort to meet growing needs and a shift in population base. And with this growth, said Rick McFee, director of supply chain management at Texas Children's, there came an excellent opportunity to streamline the system's supply chain.

"Due to both of those projects as new projects, we had the ability to look at supply chain and how we were managing all that activity," he said. "It gave us the opportunity to look at new ways of doing that."

McFee, based on his experiences, outlines six keys to supply chain management.

1. IT systems should support maximum flexibility. When deciding on an IT system, said McFee, the organization chose to look, first and foremost, for one that gave them maximum flexibility. "We were making sure we could manage multiple types of items," he said. "For example, not every item can fit into the same box or container, so we needed to make sure we had maximum flexibility." Having a close-cabinet system, he added, results in more limitations than an open-cabinet system, putting the emphasis on barcoding to streamline processes. "So as long as you can grab that item and scan its barcode, or have the barcode label close to the item's location, the system works," he said. "That was one of the things we were looking for: the flexibility to manage multiple different types and sizes of projects without limitations to the physical constraint."

2. Try to manage utilization at the floor level. Within Texas Children's facilities, said McFee, a nurse can pick up an item and see barcoding from both the manufacturer and the facility itself, allowing them to scan either code and document the inventory. "From a nursing perspective, they can scan it when they're pulling it off the shelf, or when they have it in their hand," said McFee. "In all of these systems that we used, the key concept is to try to manage the utilization at the floor level to the point where the user – the nurse, the technician, whoever – is basically documenting their use of that item." And, in the background, McFee continued, the system manages the generation of, say, a replenishment request automatically, "without someone having to go up and count every shelf," he said.

3. Include nurses on compliance efforts. McFee said they both train and monitor nurses on their compliance efforts, while identifying folks who may be having issues maintaining compliance. "We're talking down to the individual level or groups of folks," he said. "So if we find an item that's consistently not being captured, we work with nursing on how we can improve that, and how [we] can handle [this] in a different way." McFee added nurses also took a hard look at their own utilization patterns, which allowed the organization to dramatically reduce numbers when shifting to a new system. "We reduced the numbers for what [nurses] thought they'd be using," he said. "In some cases, they had a 10- to 12-day supply sitting on the shelves, and they were down to three to five a day for most items. That was a dramatic reduction."

4. Be aware of utilization patterns. An advantage of using a system to help streamline supply chain efforts is having the ability to key in your "true utilization patterns," he said. "All of these systems manage those utilization numbers, and they allow you to tweak those numbers to fit the true utilization patterns," he said. Communication with nurses and this function, McFee said, played a large part in the overall reduction in the inventory sitting on the floor. "That was through a multiple step process," he said. "We went through to right-size our inventory for the right volume of activity they were expecting."

5. Review your standardization and have a strong value analysis process. This is an "old stand-by" point, said McFee, and includes making sure you don't duplicate products in your supply chains. "And that means a pretty robust value analysis process, and one that's looking for opportunities, especially where we may be using a different manufacturer for achieving the same functional requirements," he said.  "It's also looking at what you can do to reduce those number of overall lines." The value analysis process, he added, should look at any addition to the supply chain from a value perspective, while comparing it to what an organization currently has in stock. "We're always looking to use the best, most efficient and most effective product," he said. "[For example,] if you have a product and you're getting a great price on it, but in reality, you're using two or three of them when one should be working – finding these issues and those items and working closely with the clinical staff to identify those opportunities for change. It's part of what our value analysis does."

6. Don't forget about the data. Lastly, said McFee, you can't forget about the data. "Data, data, data," he said. "If you're not tracking it and you don't have your utilization activity through your ERP system or your point-of-sales system, you need that utilization data on everything." He added that purchasing systems should be linked to a point-of-sales system, allowing for a "single item master," he said. "So if someone goes to order something, if it's an item that's already out there, we may prevent them from creating a PO if they could get it from our warehouse," he said. "Or, we may have a contract established for an item with a vendor. We may not stock it, but the pricing has been established, which cuts out a significant amount of time within our purchasing function."

Source: healthcareitnews