Kaiser moves to remake its supply chain

Will use software, patient records to optimize usage, cut costs
Tools

Kaiser Permanente is trying to remake the hospital supply chain, Forbes reported.

The California-based integrated provider is using new software to try and make the ordering and use of supplies for its 38 hospitals, 9.5 million members, 17,000 physicians and 48,000 nurses more efficient and less costly, according to Forbes contributor Steve Banker.

That's a change from Kaiser just five years ago, when nurses and other frontline healthcare workers were responsible for tracking down and ordering supplies, which were often siloed in multiple locations throughout the system. Recalled or expired supplies had to be discovered and returned in a virtually manual process. That form of supply chain management often meant that providers had time taken away from caring for patients.

Kaiser installed new software last year in order to improve the supply chain flow, according to Forbes. There is a master number throughout the Kaiser system for each item, and it is scanned as it is used.

"The combination of one item master and scanning allows them to have a more accurate inventory, replenishment, and recall management processes; understand their inventory costs, and then roll those costs up so that they understand the actual costs of procedures; and to aggregate their spend and drive better deals from suppliers," Banker wrote.

Supply chain management has proven successful at other hospital systems and settings. Intermountain Health Care is projected to save about $200 million over the next five years with its supply chain initiative. And a recent study in the American Journal of Managed Care concluded that improved management of supplies for spine and knee replacement surgeries can cut costs significantly.

Moreover, each supply scan is inserted into a patient's electronic medical record, and also connected to each physician, in order to determine patterns of supply use and try to eliminate variations.

The data can also be used to show doctors which methods and procedures are more successful in terms of outcomes than others. This may eventually get them to practice in a more efficient manner, Forbes reported.

Kaiser piloted its supply chain plan at four of its hospitals so far. Although it has yet to report cost savings data, Kaiser plans to roll it out throughout its California hospitals later this year.

To learn more:
- read the Forbes article

Related Articles:
Intermountain's supply chain boasts efficiency, lower cost
Supply chain management must adapt to changing healthcare landscape
Hospital systems share resources, save millions
Reap supply chain savings with better contracting, data
Healthcare groups move toward global purchasing standards