Why Hospitals are Notorious for Supply Waste

Why Hospitals are Notorious for Supply Waste

Hospitals play a critical role in providing healthcare services to patients. However, they are also notorious for supply waste, particularly in the context of surgical procedures. This waste occurs in multiple ways including items that are opened during a surgery or procedure but not used, overordering of items that end up expiring on the shelf and surgical procedure preparation with incorrect items based on historical experience, not keeping up with current surgeons and practices. These inefficiencies result in unnecessary expenses, material waste and the waste of time of hospital staff who would be much better and happier spending their energy taking care of patients. . There are several reasons behind this problem, and we’ll discuss them in order to better understand the downstream implications of inefficient capture of product usage at the point of care.

Manual and Error-Prone Tracking Systems

The current system for tracking disposable device and supply usage during surgery is often manual and error-prone. Healthcare providers rely on nurses and other staff members to document the items that are opened and used during a procedure. However, in the hectic environment of the operating room, it is easy for mistakes to happen. Documentation errors lead to inaccuracies in the data, making it difficult for healthcare providers to make informed decisions and streamline processes.

Discrepancies Between Documentation and Actual Usage

Another challenge hospitals face is the lack of a standardized system for capturing a complete record of usage. This can result in significant discrepancies between what is documented and what is actually used. For example, multiple items and product packs may be opened during a procedure, but only some of them may actually be used. Furthermore, surgeons are sometimes missing devices and supplies that are needed, which then adds additional work for the nurse to find these items in the middle of the case, compromising OR efficiency.  If health providers do not have an accurate picture of how their supplies are being used, they may end up ordering more products than needed—wasting precious resources and increasing costs.

Downstream Implications: Inefficient Resource Allocation

The inefficient capture of product usage at the point of care has several downstream implications, with one of the most significant being the inefficient allocation of resources. Without accurate data on product usage and costs, healthcare providers face challenges in making informed decisions about resource allocation, leading to less-than-optimal outcomes.

One of the immediate consequences is the overstocking of certain items. Without a clear understanding of what is actually used in procedures, hospitals may err on the side of caution and stock up on excessive supplies. This not only ties up valuable capital but also occupies precious storage space. Overstocking leads to inefficiencies in inventory management, making it difficult to anticipate and meet the actual demand for supplies.

Furthermore, overstocking can result in shelf-life expiration and product obsolescence. Certain medical supplies have limited shelf lives and may become unusable if not utilized within a specific time frame. When these items go unused due to inaccurate resource allocation, they must be discarded, thereby wasting valuable resources.

In addition to overstocking, the inefficient capture of product usage can also lead to shortages in supplies. When healthcare providers are unable to accurately track and predict the demand for certain items, they may unexpectedly run out of stock. This can disrupt scheduled procedures, delay patient care, and impact the overall safety and quality of healthcare services provided.

Moreover, inefficient resource allocation contributes to increased costs. By not optimizing the utilization of supplies, hospitals miss out on potential cost savings. This is especially significant when more cost-effective alternatives exist but are not effectively incorporated into the supply chain due to a lack of accurate data on product usage and costs.

Lack of Cost Awareness and Insights

In addition to inefficient resource allocation, the lack of real-time cost awareness and insights is another consequence of the inefficient capture of product usage. Clinicians, finance teams, supply chain managers, and purchasing teams require accurate data on product usage and associated costs to make informed decisions. Without this information, hospitals may continue to use expensive products when more cost-effective alternatives are available, further adding to the financial burden.

A lack of cost awareness and insights can result in a missed opportunity for hospitals to identify and reduce unnecessary spending. When product usage and associated costs are not accurately tracked, hospitals may not be aware of where their money is being spent, making it difficult for teams to identify and take action on opportunities for cost savings. For example, certain expensive items may be frequently ordered due to a perceived necessity, but in reality, they may not be necessary for a particular procedure or could be substituted with less costly alternatives.

Streamlining Processes and Improving Transparency

In contrast, a real-time understanding of product  cost can drive informed and timely decisions that benefit both the hospital and the patient. By capturing a detailed and accurate record of product usage and costs in real time for surgery and routine procedures, AssistIQ’s AI is able to deliver real-time visibility and actionable insights to reduce both costs and scope 3 carbon. For example, AssistIQ’s software enables hospitals to identify high-performing products and those that may present cost-saving opportunities, providing unprecedented visibility into surgical activity and associated costs. This data empowers healthcare professionals and stakeholders with actionable insights to make data-driven decisions, optimizing clinician preference cards and  driving down supply costs, while reducing the administrative burden for nurses who can focus on enhancing patient care.

AssistIQ’s AI-powered platform precisely captures product utilization and associated costs in real-time. This information generates data-driven insights for clinical, administrative, and supply chain decision-makers. By promoting cost transparency and efficiency, AssistIQ empowers healthcare providers to make the best choices for their patients without compromising their financial resources. Furthermore, this enhanced cost awareness also aids healthcare providers in identifying waste and preventing overstocking, leading to more effective space management, a reduction of financial burden, and greater sustainability.

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