Hospitals and large healthcare organizations are responsible for keeping track of a large amount of inventory, including medical equipment and supplies, patient prescriptions, and other health and wellness products. While many have inventory management strategies in place, nearly half of the hospitals surveyed were using basic Excel sheets to manually manage their inventory. Unfortunately, supply chain costs are predicted to be the highest cost for healthcare systems this year, finally surpassing labor costs.
However, by implementing a strategic and streamlined supply chain and healthcare inventory management process, hospitals and health systems have the ability to save 17.7% or $11 million per facility annually. Therefore, finding a platform to assist in inventory management workflows should be a priority for health systems, in order to save money, time, and effort and more effectively manage their inventory.
What is healthcare inventory management?
Healthcare inventory management, also known as supply chain management (SCM) is a workflow responsible for keeping track of your health system’s inventory, purchases, orders, payments, and more. An inventory management system is key in healthcare organizations that need to keep track of medical supplies, order and dispense prescriptions, or sell health products to patients. Within large organizations, inventory management strategies help protect your company from both monetary and product losses, by keeping an updated and accurate log of products and supplies.
There are two different types of healthcare inventory control management that are implemented. The first is known as perpetual inventory. Perpetual inventory systems continually update the inventory records, accounting for any additions, subtractions, purchases, and deliveries. When managed properly, perpetual inventory systems are an efficient and accurate way to track inventory for your healthcare system. However, because they required advanced software that runs automatically, there are increased costs and time associated with perpetual inventory systems, especially for organizations with multiple locations.
The other main type of healthcare inventory management systems is known as periodic inventory. Periodic inventory systems do not update automatically and daily; rather, they require manual inventory to be taken at the start and end of a specific period of time (i.e. each week). Once the inventory has been physically taken by employees, the system can be updated with new inventory data. Taking inventory periodically does take a significant amount of time, and leaves more room for error than when completed automatically. This type of inventory is best suited for smaller businesses and healthcare organizations.
Selecting Healthcare Inventory Management Software
There are a few options when choosing inventory management software. Enterprise resource planning software manages many important aspects of inventory management, such as demand and planning, procurement, shipment, and customer purchasing and delivering. However, most enterprise resource planning software is not designed for hospitals, healthcare systems or wellness businesses in general. Therefore, it is crucial that when selecting a platform to use within your healthcare system, you select one that is specifically designed to meet the inventory needs of large healthcare organizations.
As you begin to research inventory management software, you’ll quickly realize that most systems offer a host of features, capabilities, and cater to different specialties. First and foremost, your platform should be secure, cloud-based, and accessible; a platform that can be reached from the web will be easiest, as you can avoid downloading and installing programs onto multiple devices.
To help get you started, think of what is essential for your healthcare system. What features does your organization absolutely need, and which ones would be convenient add-ons? The ideal healthcare inventory management software for your organization will check-off all of the boxes in your “need” list, and most of the features in your “want” list. It’s important to find a solution that:
- Has communication capabilities
- Is easy to use
- Can be scaled to meet your organization’s needs
- Has a customizable and flexible design
- Has a comprehensive reporting and analytics
As for features, look for a solution that allows you to track and control items, notify you once it’s time to place a new order, and create purchase orders. You should also have the ability to decide who can process inventory and manage tasks within the platform.
Benefits of Inventory Management in Healthcare
✓ Streamline inventory workflows
Managing large amounts of inventory using an Excel spreadsheet is time-consuming and leaves much room for error. It’s likely that supplies are being managed inefficiently, and too much time is spent taking inventory during the workday; this time could easily be reallocated to essential patient-facing care. However, implementing a comprehensive inventory management system has the potential to improve staff efficiency, reduce inventory supply costs, and overall improve the organization’s bottom line.
Most importantly, virtual inventory management eliminates the need for paper workflows, including printing, mailing, filing, and faxing. All important information regarding inventory is easily accessible through a secure, cloud-based platform. This allows for increased visibility regarding the inventory available; therefore, staff has a better idea of what supplies, equipment, and medications are currently available for use. This, in turn, reduces product waste by avoiding ordering unnecessary items that are already well-stocked. It also reduces the margin of error in prescribing medications that are out of stock, avoiding leaving patients without necessary medications.
✓ Contract compliance
When purchasing large amounts of healthcare related products, it is strategic to work with distributors and manufacturers that offer bulk purchasing contracts. These types of contracts are crucial in getting reduced prices when purchasing large amounts of essential product and medication. However, implementing this strategy requires an efficient inventory management system. If inventory is ineffectively managed, healthcare systems may either find themselves with too much or too little product, leading to a situation in which they would need to break their bulk purchasing contracts to place early or delayed orders at full price. With a proper inventory management system in place, the risk of this happening is lowered significantly.
✓ Improves communication between care and administrative teams
It is likely that in large healthcare organizations, there is an administrative team in charge of inventory management. However, this team is not likely to include healthcare providers of any level. The administrative team is therefore very knowledgeable on the current inventory availability and needs, while care teams with limited access spend unnecessary time tracking down information from those responsible for inventory management. A virtual inventory management software allows both teams access to necessary inventory updates regarding medications and healthcare supplies.
Using Healthie’s Healthcare Inventory Management Feature
Healthie provides a practice management and client engagement solution for organizations of all sizes — from small wellness businesses to large healthcare systems and enterprises.
Healthie has a full back-office suite, with tools for scheduling, EHR, e-paperwork, and billing. Soon to accompany this suite is Healthie’s Inventory Management feature.
Once live, this feature will allow you to keep track of products and supplements that you sell to clients, as well as pre-load these products into Healthie’s billing system for rapid checkout. Your clients will also be able to purchase a ‘bank’ of products and utilize that bank over time.
Learn more about how a practice management platform can streamline your wellness business operations.
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