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4 ways analytics can improve supply chain operations

The complexity of managing a non-acute network of facilities is often significantly underestimated. Each specialty – from physician offices to surgery centers to home health – has different medical-surgical, pharmaceutical and lab supply needs. Many non-acute sites also use different technologies to purchase and monitor inventory. Consequently, health systems with multiple non-acute care sites can struggle to gain visibility into their non-acute purchasing trends in order to meet organizational goals like cost reduction.

Using analytics built specifically for non-acute care sites can help deliver insights that alleviate process inefficiencies, drive standardization and reduce non-acute clinical spend. Analytical insights can also help your health system better manage product standardization to reduce clinical variation across your patient population.

Across the non-acute continuum, health systems should look for analytics that can:

  • Provide an integrated view across all non-acute settings regardless of purchasing platform
  • Benchmark operational performance of your organization against similar health systems
  • Offer data visualization reports that can be shared with internal stakeholders
  • Identify inefficiencies and product waste
  • Centralize data to improve inventory management
  • Help deliver more strategic management of non-acute care

Here are four ways health systems can improve their business intelligence.

1 | Reduce waste and inefficiencies through analysis of purchasing data

male doctor using McKesson Business Analytics on iPadThe procurement process presents one of the greatest opportunities for health systems to use analytics to drive down costs. By analyzing performance measures such as purchasing frequency, supply chain leaders can assess procurement practices within individual facility to identify inefficiencies. This information can help them identify where high levels of waste may be while also enabling better sourcing of products according to quality, volume and price.

“In terms of analytics driving decision making, we are able to look at your clinical data, such as what lab tests are being run, what procedures are being scheduled, in order to ultimately automate the resupply process completely for that facility,” said Jacob Hookom, vice president Business to Business Customer Experience at McKesson.

2 | Use inventory analysis to increase standardization

By standardizing their non-acute care inventories, health systems can further reduce costs by minimizing product variation, which can push inventory costs of non-acute care higher, as well as by reducing clinician time spent managing a more complex inventory. However, product standardization can be difficult when non-acute facilities are spread over a large geographic area or use different operating systems.

Non-acute suppliers can help health systems improve their product standardization by analyzing inventories and sharing that data with supply chain leaders. This will allow health systems to enhance care quality by ensuring that all clinicians use only the same high-quality products while reducing costs through volume discounts.

“From an analytics perspective, we can really support health systems and their non-acute settings by facilitating SKU standardization efforts, and helping to achieve volume tiers and increases leverage with manufacturers to reduce costs,” Hookom noted.

3 | Improve inventory management throughout the non-acute care continuum

Inventory management is always a challenge – too little inventory can leave health systems with product and drug shortages when unexpected circumstances occur. However, too much inventory can push costs up and lead to waste because some products expire before they get used.

By analyzing their most-recent inventory report, health systems can gain visibility into use and spend that can help ensure they replenish supplies in a more efficient and cost-effective manner. Using this increased visibility, health systems can then develop an accurate distribution model, allowing them to order the exact quantity of supplies they need. This is especially important for clinics and medical offices with limited storage space.

“Over 75% of what we process for our primary-care customers is in a low unit of measure,” said Brad Hilton, senior vice president of customer experience at McKesson. “That allows them to not tie up inventory…and to really hit the right quantity that they need to take care of their patients, while not occupying too much valuable real estate in the supply room and too much working capital in inventory that they don’t need.”

4 | Achieve more strategic management of your non-acute supply chain

As patient care continues to move outside of acute-care facilities, there is a greater need for more patient-centered supply chains that can support the delivery of care wherever and whenever the patient needs it. “Care conducted in the ASC setting is moving to physicians’ offices, and services provided in physicians’ offices are moving to the home,” Hookom noted. “So the whole idea of where supplies are used is also migrating.”

Health systems that partner with their suppliers to use data and analytics to improve supply chain operations can not only achieve more strategic management of their non-acute settings, but also deliver better clinical outcomes. In fact, nearly 85% of providers and suppliers have indicated that integrating supply chain data with clinical data has become a strategic focus, according to a 2018 Healthcare Supply Chain Trends/Issues survey.

“By establishing those data sets with your clinical analysts for comparison and working with your suppliers to aggregate and analyze utilization data, you’ll realize the benefits to quality of care and the application of those products across patient populations,” Hookom said.

Analytics can bridge the gap between supply chain and patient outcomes. Using McKesson’s interactive business analytics dashboard, customers have shared with Hookom’s team at McKesson that the tools McKesson provides to clients is invaluable. “Customers tell us that their team has been able to help drive better operational efficiencies using these analytics and tools…including analytical intelligence to change or augment the overall supply chain process,” he stated. One customer uncovered a 20% savings opportunity through product conversion and standardization.1

1: Based upon customer’s proprietary information uncovered via the McKesson Business Analytics tool.