Industries

As healthcare executives look to reduce nonlabor expenses (comprised of supply, pharmaceutical and purchased-service components), they must balance financial improvements against such traditional staff and physician satisfiers as availability and choice. Rather than focus solely on expense reduction, non-labor cost containment initiatives should also try to improve utilization, demand, purchasing, inventory and vendor management.

There are numerous signs that may suggest ineffective management of materials, including

• Excessive non-labor costs in relation to industry benchmarks
  
• Inability to maintain GPO compliance
  
• Large and unnecessary inventories (greater than 30 days)
  
• Significant non-stock and “rogue” buying
  
• Lack of staff and physician confidence in ability of materials management components to provide timely products and services
  
• Inability to track and budget non-labor costs
  

The Healthcare Services Team of RSM McGladrey helps healthcare organizations across the country identify and resolve these and related issues. Our team of healthcare consultants has the Specialized KnowledgeSM and experience in non-labor redesign, performance management, clinical and nonclinical operations, change enablement, process improvement, organization development and the use of management information to help your organization improve material management and contain costs.

Our Approach
We offer an integrated approach that can be customized to fit your organization’s individual needs. Based on a broad range of industry “best practices,” our approach incorporates the critical elements for successful non-labor resource management and positions your organization for sustainable, improved performance. Our approach is based upon

• Application of healthcare and related industry best practices to achieve substantial cost and service improvements;
  
• Establishment of credible, benchmark-driven supply and purchased service cost targets at hospital and cost center levels;
  
• Detailed improvement strategies that include physician and staff participation in managing supply and purchased service demand and utilization;
  
• Implementation of support structures (e.g., value analysis teams) that guide and sustain supply chain improvements;
  
• Clearly defined models for managerial competence.
  

Utilizing this approach, we can help your organization

• Lower supply chain and purchased-service costs and utilization;
  
• Standardize supply and purchased-service-related procurement and utilization procedures;
• Align organizational and clinical structures with supply and purchased-service efficiencies;
  
• Improve internal supply chain and purchasedservice- related services;
  
• Develop efficient procurement processes (selection through payment);
  
• Establish favorable and consistent vendor pricing and relationships;
  
• Minimize off-contract buying;
  
• Eliminate supply and purchased service redundancies and unnecessary products.

Integrated Supply Chain Redesign
Total Expected Savings

Contacts:
James E. Hosking, FAAHC, FHIMSS, FACHE
Managing Director
Tel 312.634.7104
jim.hosking@rsmi.com