Why strategic sourcing is vital in health care

At a time when U.S. health care organizations are seeking to reduce costs, many are executing poor sourcing practices that are contributing to superfluous expenses.

Administrators aren't the only ones at fault, though - physicians are prescribing medications that aren't needed to deliver successful patient treatment. In order to get everybody on the same page, centralizing the procurement process appears to be the best solution.

Overcompensation leads to waste

The Centers for Disease Control and Prevention collaborated with Premier on a new study, which charted how U.S. hospitals are procuring materials based on the perceived needs of those receiving treatment. Overall, the research discovered many facilities are ordering and using an unnecessary amount of identical antibiotics, which costs the industry nearly $163 million in frivolous expenses.

For example, Premier and the CDC found 70 percent of therapies that may not be necessary to a patient's health use three specific drug combinations when treating people with anaerobic infections. As far as intravenous pharmaceutical care is concerned, 32,507 cases of redundant antibiotics treatments occurred between 2008-2011.

"The overuse of antibiotics is an industry-wide public health issue that is occurring across all care settings," said lead author and Premier Safety Institute Director Leslie Schultz. "Sometimes in an effort to 'do whatever it takes' to fight a serious infection, clinicians use multiple antibiotics to treat the same infection. This practice can contribute to antimicrobial resistance, put patient safety at risk and increase costs."

A new take on strategic sourcing

Not only must hospitals combine their departmental procurement initiatives, they must also factor patient needs into the process. Having physicians and other experts collaborate to deduce which antibiotics and other medicines are best suited to treat certain conditions is a necessity.

This approach to achieve corporate cost reduction also ensures hospitals abide by standards defined by the Office of the Inspector General and other regulatory authorities. Supply & Demand Chain Executive Gary Johnson asserted governance, risk and compliance should be an integral part of materials acquisition.

For instance, when a hospital uses patient data and runs analysis tools, it must ensure all digital information is being transferred over a secure environment. The Health Insurance Portability and Accountability Act obligates all organizations participating in the medical industry to adhere to this regulation. Those that fail to do so may be subject to fines or prosecution.

Health care isn't getting cheaper, and that's a huge problem for a nation in which many people cannot afford to seek proper care when they need it.

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