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inventory management
Operational
Cost Creep
Consistent inventory management is critical to avoid
unnecessary expenses. By Michael Jones
Michael Jones is on staff at
ADVANCE.
There are any number of additional expenses
in a healthcare facility that seem small
in relation to the overall budget, but can
become substantial in the long run. These factors
have to be kept in check—by the varying
departments and by employees on the individual
scale—to cut down on unnecessary costs. In a
recent interview, Joe Skochdopole, CCE, senior
director of operations support at TriMedx, provided
some insight into potentially costly habits
a facility can develop over time and what can be
done to avoid cost creep.
“I believe the appropriate approach is, ‘how do
we maximize what we have before we talk about
cutting quality?’” said Skochdopole. “There are
so many efficiency and waste issues in healthcare
that I don’t think we have to reduce quality in any
way, shape or form.”
Skochdopole presented three factors in particular
that can cause cost creep in a facility,
which include:
n The extra fees and expenses that occur after
the initial payment is made on medical devices,
consumable pieces
n Extra capital spending in departments, such
as software and hardware updates, service
charges and enhancements
n The importance of standardization
A common problem in hospitals, clinics and
other healthcare institutions is an abundance
of medical devices and machines, all from
different manufacturers that require specific
parts. Due to this lack of standardization and
the varying accessibility of medical equipment,
facilities end up overspending on maintenance
costs alone.
“Manufacturers are trying to figure out how
to increase their revenue streams,” continued
Skochdopole pointedly. “How do they stay competitive
from an acquisition standpoint, but continue
to keep revenue coming into them for the
life of that device?”
Early Action
To be successful at cutting down on cost creep
expenses, it has to be started early in lifecycle
management and implemented facility-wide via
policies and regulations as well as on the individual
level. Skochdopole noted on the need for
early action, citing preventive measures like the
development of cross-functional committees to
monitor the purchasing of medical devices
A common problem
in hospitals, clinics
and other healthcare
institutions is an abundance
of medical devices
and machines,
all from different manufacturers
that require
specific parts.
% cost/revenue
cost “creep”
cost-cutting exercise
target
time
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