Located in Utah and southeastern Idaho, Intermountain Healthcare is a nonprofit system of 22 hospitals and a Medical Group with more than 185 physician clinics.
Without a standardized system in place, multiple departments at Intermountain Healthcare purchased similar patient ID products from a variety of suppliers. This led to an overabundance of SKUs, increased supply costs, and inconsistency between products that impacted caregiver efficiency and patient safety. Inefficiency resulted as separate departments dealt with dozens of suppliers to order same or similar products.
The decentralized processes led to a lack of visibility of total spend and an excess of suppliers and purchase orders, driving SKU levels to uneconomical proportions. The inefficiencies also overburdened Intermountain staff responsible for managing, monitoring, and tracking the surplus.
Most alarming is that Intermountain isn’t alone in this dilemma. On a national scale, hospitals lose millions of dollars per year in hidden expenses due to missed opportunities for cost containment and incorporation.
Enter PDC Healthcare’s ValuePlus® Service
Intermountain Healthcare needed a consultative partner that could help the organization optimize product spend and streamline workflow as effectively and professionally as it treated patients. PDC Healthcare, Intermountain’s wristband and label supplier, responded via its ValuePlus® Standardization Program—a service that the healthcare identification company offers for free.
“When we’re buying a large quantity of similar items from different suppliers, we miss out on opportunities to leverage our volume. By reducing our SKUs and consolidating those to a preferred supplier, we knew we could attain better discounts and get better service,” said Curtis McEntire, Sr. Manager of Supply Chain Solutions. Through standardization, the hospital also sought to enhance consistency between products, which in turn, improves patient safety and caregiver efficiency.
The Audit & Analysis:
Swiftly putting plan to action, a team of four consultants from PDC Healthcare visited Intermountain’s Salt Lake City facility to perform a department-wide audit and analysis. Product data including part numbers, usage, and total dollar spend were used to develop an audit report, which identified all products with standardization potential, complete with a cross reference with contract pricing showing ultimate savings.
The PDC Healthcare Team presented compelling metrics, revealing the root causes of Intermountain’s purchasing predicament. “For one, 61 suppliers were outsourced for patient ID products across the entire healthcare organization,” said Geana Smalls, Director of Marketing, ValuePlus® and Labels. “The large amount of suppliers and small amount of visibility of overall orders led to unnecessary purchases and product overlap. More costly custom products were outsourced when lower-priced stock items were available.”
While exposing the fiscal effects of the problem through metrics, PDC Healthcare also identified product application processes that raised the risk for potential human errors among caregivers. McEntire explains, “In several cases, multiple labels were used when only one was needed. A nurse would perform one shift at a hospital using one supplier’s label, and move on to a second shift at another hospital using a different label for the same application.” The inconsistency increased the need for staff training; impacted workflow time and inefficiencies; and raised the risk for human error among caregivers.
ValuePlus® Product Standardization Simplifies Processes
As part of the consolidation process, PDC Healthcare identified instances in which multiple medical labels were used for applications requiring only one, while recommending more streamlined solutions. Christine Navarro, PDC Healthcare Account Manager, specified, “In one case, five allergy labels—several of which were customized at higher costs—were ordered through multiple purchasing channels. We were able to standardize down to one stock label, knocking out four SKUs.”
Going hand-in-hand with the consolidation benefits, Intermountain Healthcare also gains a competitive edge from PDC Healthcare’s long-standing expertise in patient safety. The transition to PDC’s industry-leading wristbands and labels offers more consistency between products (including size, design, and color), while providing improved safety and protection of patients. Streamlining patient identification products reduces the chance for manual errors to better protect patients.
In addition, caregivers receive peace of mind knowing that their patient ID products are consistent across the continuum of care, regardless of the hospital department or facility they happen to be working in.
In recommending the right products for the right application, PDC Healthcare consultants help Intermountain to comply with important patient safety regulations on an ongoing basis. These include The Joint Commission National Patient Safety Goals, American Public Health Association (APHA) for protection of patient privacy, the Centers for Medicare and Medicaid Services Stage 2 eMAR bar coding requirements, and the Health Insurance Portability and Accountability Act (HIPAA) for protection of individuals’ health information.
Comparing ValuePlus® to Other Standardization Services
In comparing ValuePlus® to other standardization services, McEntire was wowed by the amount of resources PDC Healthcare put forth, which differentiated it from other suppliers.
“When choosing a partner, we look closely at their level of commitment,” said McEntire. “While we’ve had various levels of success with standardization programs in other categories, PDC Healthcare’s commitment to investing the right resources made a major difference: the attention to detail in the auditing phase….the responsiveness from their full team throughout the conversion. They did all the heavy lifting, which made my job a lot easier.”
McEntire was also impressed by how quickly results were achieved. “The reduction of suppliers and SKUs were realized soon after we made PDC Healthcare our preferred partner. The service had an immediate impact on our efficiency. Ideally, you look at a supplier as an extension of your team that can help you accomplish your goals. In this case, PDC Healthcare exemplified that.”
Building on the Benefits of ValuePlus®
After launching ValuePlus®, Intermountain Healthcare has exceeded its goals for the purchase of labeling products:
- SKU reductions have doubled goals
- Suppliers are reduced to optimal levels
- Purchasing of this product line is centralized to operate most efficiently
- Product standardization provides a higher level of consistency and safety— from admissions to discharge
- And clinicians are more empowered, supported by the most technologically advanced products in the industry to help meet regulatory compliances.
The ability to achieve standardization and savings across your entire supply chain, while meeting critical patient compliance is no easy feat. It involves a culture change that requires time and resources, which most companies don’t have. Don’t attack the challenge alone. As your consultative partner, PDC Healthcare will guide you through a totally seamless and integrated procurement process that will reduce your supply costs and optimize your purchasing volume.