Low spend, big problems

The 3 biggest mistakes supply chain professionals must avoid with low spend categories.

Sponsored: Hollister

September 2022 – The Journal of Healthcare Contracting

For healthcare supply chain teams, there’s no getting around it – the bottom-line matters. Yet, if only the bottom-line is considered, and not the quality and performance of products, there is the risk of adding unforeseen costs from less-than-optimal patient outcomes. The following are three of the biggest mistakes supply chain teams can make in low spend categories.

1. Making low spend categories a low priority

Low spend categories are often the first products scrutinized to meet the immediate need for cutting costs. But, the consequences of low cost options may, in the long run, increase the readmission risk or negatively impact patient satisfaction scores. In turn, as a result, financial, clinical and overall hospital system scores could be negatively impacted.

Here’s an example: 55.7% of patients receiving ostomy surgery are readmitted with evidence of skin complications compared to 35.5% of those without skin complications1. When selecting products for these surgeries, careful scrutiny of ostomy barriers could reveal that they are not all created equal, especially when it comes to the health of the skin around the stoma.

2. Not considering the company behind the products

Supply chain teams must ask suppliers hard questions, such as, do you have visibility to possible disruptions upstream in the supply chain? Do you only manufacturer overseas, or do you have investments in U.S. facilities? What is your fill-rate track record? 

Amid the pandemic, health systems across the nation learned first-hand that a supplier’s reliability was paramount to the security of their own supply chain. Maintaining relationships with trusted partners who understand the realities that healthcare systems face every day became more important than ever and lessons learned on experience and tenure were invaluable.

3. Electing to go with lower cost options may overburden your nurses with complications and readmissions

Too much focus on margin can cloud the health system’s clinical mission of care. Carefully selecting quality products proven to avoid healthcare-associated infections (HAIs), such as CAUTI, can close the gap between supply chain goals, clinical practice and outcomes.

To reinforce this point, the Agency for Healthcare Research and Quality (AHRQ), reported that Healthcare Acquired Infections are among the leading threats to patient safety, affecting one out of every 31 hospital patients at any one time2. Over a million HAIs occur across the U.S. health care system every year, impacting the clinicians caring for these patients and adding billions of dollars to health care costs2. In fact, one of the most prevalent HAIs are Urinary Tract Infections (UTIs) costing the health system approximately $13,973 per incident3 and adding more clinical care for busy nurses.

With products in Ostomy, Continence Care, Wound Care and Critical Care, Hollister is one partner dedicated to delivering the highest standard of quality in medical products and has been serving healthcare professionals and patients for 100 years. For more information, contact your Hollister Key Account Manager.

1 Taneja C, Netsch D, Rolstad BS, Inglese G, Eaves D, Oster G. 2019. Risk and economic burden of peristomal skin complications following ostomy surgery. J Wound Ostomy Continence Nurse. 46(2):143-149. N=249.

2 Agency for Healthcare Research and Quality Associated Infections Program, page last reviewed April 2022, AHRQ’s Healthcare-Associated Infections Program | Agency for Healthcare Research and Quality

3 Estimating the additional hospital inpatient cost and mortality associated with selected Hospital-Acquired Conditions, Table 7, Agency for Healthcare Research and Quality, page last reviewed Nov. 2017. Found at Results | Agency for Healthcare Research and Quality (ahrq.gov)

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