Open the Door to Data Access…and Unlock Savings

Open the Door to Data Access…and Unlock SavingsWe believe that your staff wants to make the right business decisions for your hospital —they  just don’t have the healthcare supply chain information they need, when they need it.

We’ve found the best way to improve supply chain decision-making is to open up that access to information.

So, if you demonstrate to requisitioners which thoracic catheter is the best-value choice, they’ll usually pick it.  And when your value analysis team has functional comparison data, they will improve standardization and the contracts they negotiate.

By giving people the right information up front, you actually gain more control over purchases because you can direct them to the supply chain decisions that best fit your organizational goals.  They aren’t making decisions in the dark.  And that creates a gateway to significant supply chain savings.

So how do you get started?

First, you need to break down data barriers between systems, departments and people, and create an environment of information sharing:

  • Encourage an Open Data Policy. Some managers and departments are too territorial about their data. I’m not suggesting you throw the door wide open — there is sensitive data that only high-level personnel should have access to.  But most product, contract and pricing information should be available to clinicians, accounting and materials managers alike.
  • Consolidate to a Single Source of Data Truth: A cloud-based content management system can incorporate all of your internal data (purchase order history, item master, charge master and contracts) with vendor data on millions of products — all through a single access point. Typically, about half of med-surg spend takes place outside the item master, (48% of spend and 52% of items),[i] and therefore outside your vision and control.
  • Facilitate Data Capture and Sharing: A SaaS-based procurement system can provide easy sharing of information. It’s fast.  It’s friendly.  And purchasers can’t go around it.  Every purchase is captured — even those illusive physician preference items that can account for as much as 60% of your medical-surgical purchases. [ii]
  • Provide Easy Universal Access: A cloud-based procurement system provides flexible access anytime, from any department or facility. Remote access means managers can be alerted to critical issues needing attention while they are out of the office, so things don’t shut down.

Once you centralize product and purchase data, and implement a centralized procurement system, you need to help users make the best supply chain decisions based on your contracts, pricing and savings goals:

  • Define Your Product Formulary: Rank your med-surg items based on your prices and contracts; i.e., your product formulary. Products that fall under a preferred tier-level contract and are in stock get a Level One ranking.  Products that have the next best contract are ranked second, and so on.
  • Direct Users to the Preferred Choice: There are thousands of products and millions of contract lines, so when a user goes to requisition, he/she needs help in identifying which is the “ideal choice” for your organization. A formulary-based procurement system does the work to determine that “best” item and contract line to present to the user.
  • Let Users See What They’ve Saved: We’ve found people enjoy knowing they’ve saved money. So use a procurement system that displays the savings for the current purchase and tracks that individual’s overall savings.  This helps each member of your team feel like he/she is contributing to the organization’s overall success.
  • Monitor “Exception” Purchases: Despite knowing the preferred item choice, users will sometimes need to make another selection. And that’s okay — they should have that freedom.  Just be certain an approval path is in place and that the exceptions are captured and catalogued for later review.  You might determine that changes need to be made in the formulary hierarchy or that certain users/departments need to improve their compliance.

By instituting an “Open-Door Data” mindset and technology, your staff will have the information and autonomy to make educated supply chain decisions — decisions that will support your financial goals.

To find out more about how a SaaS-based, formulary-managed procurement system can be your entrée to significant savings read our white paper Understanding How Predictive Tools Help Expedite Value Analysis.


[i] McKesson/Meperia internal data, based on procurement data assessments of over 125 healthcare systems/hospitals.

[ii] McKesson/Meperia internal data, based on procurement data assessments of over 125 healthcare systems/hospitals.