As the Product Manager at Intranet Connections, one of my responsibilities is to understand the overall trends in our customers’ industries, and think of ways in which our intranet software can be used to address new concerns. As part of this research for our hospital customers, I stumbled across this excellent article “How Sourcing Excellence can Lower Hospital Costs”.
In a nutshell, a recent trend in the healthcare industry is insurers moving to risk-based payment models. Instead of the hospital billing the insurer for services rendered, insurers compensate hospitals based on set payment per patient per year. Under this model, for hospitals to remain profitable, they must maintain strict cost controls. According to this article, the largest cost for a hospital is labor, followed by supplies.
There are many ways intranet software can help save labor costs by reducing the overall number of FTE and PTE staff through time saving measures. These include standardizing processes using Online Forms, making procedures easier to find through centralized document libraries and online training.
What has not yet been widely explored is if intranet software can help reduce supply costs by facilitating better sourcing practices for the hospital. According the article, “Better procurement practices can help hospitals achieve rapid supply cost reductions of 20 percent or more”. It recommends first creating a central procurement group, and then a three phased approach to find opportunities for savings. Phase one deals with “basic in-directs” such as computers and office supplies, which clinicians usually don’t care that much about. Then, during phase two, finding savings with “low-preference clinical” items, such as exam gloves, needles and gowns. Finally, in phase three looking at “high-preference clinical” items such as surgical packs, and implants. The basic theory is, the procurement group must engage and collaborate with physicians, other health professionals and administrators, starting with low preference items first, building trust, then move one to high preference items.
It’s probably not surprising I feel a Healthcare Intranet can be a great tool to help address some of these challenges, especially with communication between the central procurement group and the rest of the hospital staff. Here is how I would build out a solution using an Intranet Connections’ Healthcare Intranet:
The central procurement group should really have their own site, part of which is accessible by the rest of the organization, and part of which is private. Creating a sub-site, or Department Site, for the procurement group allows you to safely delegate ownership. The procurement group can simply upload, publish and share information without needing to go through IT.
This Department Site not only provides the functional requirement for the group (accessible from multiple locations, document repository and shared calendar), it can also help reinforce the identity of the cross-functional team. Having a private space for team members to collaborate via a Discussion Forum will help foster collaboration between meetings. As the article states, “Establishing cross-functional teams early on also lays the groundwork for discussion to come about high-preference clinical items”.
As mentioned in the previous step, part of the central procurement group Department Site should provide information to the rest of the organization. The obvious healthcare intranet features to start with would be to publish news announcements and blog posts about the group’s activity. It is also relatively simple to set up an anonymous suggestion box, allowing staff to identify areas of cost waste without the risk of repercussions.
Another interesting idea is to implement the Company Store application, with all the possible alternatives to commonly used products. The Company Store lets staff view pictures and read descriptions of all the items currently being considered as lower cost alternatives. If any staff member feels one of the items in the company store may be better than what they currently use, they can order the item and try it out. Who doesn’t love online shopping?
Build trust by soliciting feedback, but in a controlled way. Because phase one deals with “basic in-directs” such as office supplies, this is the perfect opportunity to establish trust by actively soliciting feedback. As a simple example, let’s pretend that the procurement group has identified three lower-cost black pen options from a supplier. Procurement delivers a “gift” box to each department containing a dozen of each different pen type, with a card. The card says, “Help us choose the best pen for our hospital! Try them all out, and vote for your favorite on the intranet!”.
When staff visit the procurement Department Site, they can vote for their favorites using the Quick Poll widget. The results can then be shared once all votes are in, and everyone can see which one was the most popular. Procurement can then go ahead and save money by ordering the favorite in bulk. While staff who chose another pen might not be happy with the decision, at least they understand why the decision was made, and had the opportunity to have their say.
Of course, for medical items, the procurement group must be savvy enough to distinguish between physician preferences, versus actual performance, which brings us to the next recommendation, standardize feedback.
One of the key points in the article is that the procurement group must be a cross-functional team. This is because they need the medical expertise to distinguish between physician preferences versus actual product performance. When physicians or other healthcare staff are testing out different alternatives, the feedback must be structured to collect objective, not subjective measures. On the intranet, you can create Online Forms to collect feedback in a structured way.
For example, instead of emailing the question “Which exam gloves did you prefer?”, instead get evaluators to fill out an Online Form or Online Survey, asking more pointed questions such as, “How many times did the glove split when putting it on?” or, “How many extra times did you have to wash your hands because the glove did not come off cleanly?”. The tabulated results of this feedback can then be shared with the rest of group once a decision is made, proving that the procurement group isn’t making cost saving decisions without considering the impact on staff and patients.
There is a lot more information in the article that presented here (especially for phase three), but I think a healthcare intranet can be a very powerful tool in empowering the central procurement group in their cost saving efforts. Of course, at the moment this is all just theory. If you are an existing or new customer who would like to implement the above suggestions, I’d love to hear from you at email@example.com