Benchmarking Still Drives Savings

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20yearsofsavingsIndustry embraced a simple idea in the 1980s. The idea was that it was possible to search for the best practices that will lead to superior performance by comparing cost, time or quality of one organization to another. This process is called benchmarking and it has been immensely successful in all industries—including healthcare — for almost three decades!

Here’s the rest of the story! One BIG gap that we have found in healthcare benchmarking practices is that this technique is not universally applied to the identification of supply expense savings opportunities. Yet, healthcare organizations that are benchmarking their supply expenses systematically have found that benchmarking is “what drives savings” for their hospital, system or IDN.

No longer do these progressive healthcare organizations need to guess where their supply savings are hidden, they now know precisely what to target for their next savings opportunity since their benchmarking has illuminated the way.

For instance, one of our dashboard clients discovered that their hospital wasn’t recycling their Compression Sleeves at the level that they should have been reprocessing, thereby losing $62,655 in annual savings. What happened was the storeroom manager forgot to order in the reprocessed sleeves for a 6-month period, a mistake that we have seen many times but the benchmarking was able to show them they had a problem.

How would this hospital have known this important fact if they weren’t continuously benchmarking to improve their performance? The answer is they wouldn’t have known unless they had stumbled over this anomaly in their supply chain by happenstance. Then it would be too late to recoup their big losses!  

If you want to be on top of your supply chain game, benchmarking your supply expenses shouldn’t be ignored or be a “one time event”. It should be a regular (we recommend quarterly), systematic measuring of your healthcare organizations’ supply chain expenses against those who are recognized as best-in-class practitioners in healthcare or even in other industries. In this way you can make certain that you are the best of the best in ALL of your categories of purchase.

Filed Under: Benchmarking

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