Supply Chain and Purchased Services Cost Reduction
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The 325-bed flagship hospital of a non-profit, community-directed Wisconsin health system was spending approximately $90 million in supplies, drugs and purchased services. As part of a broader initiative to improve operating margins, the hospital needed to reduce supplies and purchased services costs by $8 million.
Prism and representatives from key supply departments, such as OR, Cath Lab, Lab, Pharmacy, Radiology and Purchasing, formed a non-labor project team and implemented more than 100 initiatives, including:
- Reduced supplies and purchased services costs by negotiating better pricing, using more cost effective products and decreasing utilization.
- Lowered pharmaceutical expenditures by shifting to alternative drugs and applying different usage practices.
- Negotiated better pricing for surgical items including spine products, orthopedics and endomechanicals.
- Improved blood utilization and patient safety by implementing new transfusion guidelines.
- Lowered supply inventory by resetting par levels and adjusting replenishment processes.
- Developed an Enterprise Project Management Office and scorecard framework to measure performance on a monthly basis.
“The Non-Labor team, in concert with Prism, implemented over $8 million in supply and purchased services savings.”
Flagship Hospital President