How to deploy actionable insights to drive efficiencies and cost-savings with supply chain management in healthcare

Healthcare leaders are constantly exploring new ways to improve efficiencies and cut costs in the supply chain because it is the second highest expense on average for hospitals, behind labor. 

During a Sept. 17 webinar, hosted by Becker's Hospital Review and sponsored by Alteryx, Andy Dé, senior director of healthcare solutions strategy and marketing for Alteryx, described the challenges facing supply chain leaders and how providers can leverage advanced analytics that provide automatic insights into their supply chain to boost efficiency, cut costs and improve patient outcomes.

Michael Buhrfiend, pre-sales consultant at Alteryx for healthcare, joined Mr. Dé in the last few minutes of the webinar to demonstrate how the Alteryx self-service data analytics platform works. 

The challenges in the healthcare supply chain

There is significant waste in the healthcare supply chain, which partially stems from a lack of visibility into some of the most important aspects of this area of operations, Mr. Dé explained. 

For example, many hospitals don't properly monitor and measure supplier compliance, off-contract buying and utilization of various products and medications, Mr. Dé said. This can lead to accruing unnecessary costs from expired products, paying for expedited shipping to avoid stockouts or paying more than needed for off-contract items. It can also lead to inconsistent supplier performance, which drives up costs.

"Inefficient supply chain management practices are costing hospitals millions of dollars in completely avoidable value leakage," Mr. Dé said. "Stockouts, expired products and expedited procurement … that is a reality at 60 to 70 percent of hospitals."

In addition to a lack of visibility, inefficiencies arise when managers spend too much time on manual tasks, clinicians have to fill out paper-based product orders and analysts have to manually build out spreadsheets or data visualization reports.

The solution

While there are many challenges in the supply chain, these issues can often be addressed by using the power of analytics and data science, Mr. Dé said. 

Analytics and data insights can help providers answer several key questions, including: How automated are transactions with vendors? Is spend optimized with key suppliers? What inventory items turn the most? What items did the system purchase last year? 

Curating and refreshing the appropriate datasets to answer these questions can help hospitals optimize and automate supply operations and workflow, Mr. Dé explained. 

Alteryx's platform helps providers aggregate and capture data from healthcare and non-healthcare sources and blends that data. From there, the platform pushes the datasets into easy-to-read data visualization reports to drive evidence-based decision making.

A health system's success story

Executives from Broomfield, Colo.-based SCL Health set a goal to generate $15 to $20 million in annual cost savings across the health system, which includes eight acute care hospitals, 100 physician clinics and five ACOs.

With non-labor operating spend eclipsing $1 billion, SCL Health leaders understood the financial importance of supply chain management. However, fragmented and un-timely data from disparate sources inhibited continuous improvement in the supply chain across the system, Mr. Dé explained. 

The system was struggling to integrate supply chain with clinician priorities, gain accurate visibility into inventory levels and share these supply insights with necessary stakeholders. In the past, the system created a report of some supply-related data monthly, but this was not timely enough, Mr. Dé explained. 

Due to these challenges, the system tapped Alteryx to help develop curated datasets to automate supply reporting and supply chain workflows. SCL created point-in-time data sets on item spend, vendors and locations. In addition, datasets were created to capture transactional data like invoices, purchase orders and warehouse issues. The Alteryx-derived datasets were then automatically pushed into easy-to-read data visualization platforms. 

"Instead of the metrics being reported on a monthly level, they are now refreshed on a daily level," Mr. Dé said.

With the Alteryx platform, SCL Health's supply chain metrics are now automated and refreshed daily without analysts needing to invest time to create the reports. 

In a short period, with the help of Alteryx, SCL Health was able to save $160,000 annually from eliminating unnecessary software subscriptions and reducing invoice discrepancies by 17 percent.

The health system plans to expand its partnership with Alteryx to help identify clinical variation and cost-per patient opportunities and drive insights for pharmacy and implant utilization.

A health plan's success story

SCAN Health Plan, a Medicare Advantage insurer that has 200,000 beneficiaries in Southern California, has a special investigations unit that helps detect fraud, waste and abuse in the program.

Investigators in the program discovered that some SCAN Health Plan members were receiving large quantities of un-ordered Lidocane in the mail, and some claims were up to $1,000 above the typical prescription price, suggesting fraud was involved, Mr. Dé explained.

The investigations unit attempted to use a Microsoft data server to identify the pharmacies fraudulently prescribing Lidocane, but it couldn't handle the data volume, Mr. Dé said.

As a result, the health plan tapped Alteryx to help.  With the Alteryx platform, the plan was able to map out its network of pharmacies using data preparation, blending and data visualization.

The visualization of data provided by Alteryx allowed the health plan to easily detect the outliers, stop the fraud and save millions of dollars.

"SCAN Health Plan was able to save almost $1.5 million in the very first year and an additional $1 million the following year," Mr. Dé said.

Overall, there are many challenges associated with healthcare supply chain. However, these pain points can be mitigated with advanced analytics that automate supply reporting to free up time for employees and empower evidence-based decision making.

To listen to the webinar and access the demo, click here.

To learn more about Alteryx and how it can enable improvements in operations, assets, procurement, sourcing and other key supply chain tasks, click here.

More articles on supply chain:
Prior authorizations making it 'as difficult as possible' for patients to get necessary medical supplies
Beaumont Health sells home medical equipment business
Cancer risk spurs new push to replace device sterilization technique

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