Vendors can help improve service, save money
Hospital eliminates inventory, handling costs
By persuading a local vendor to keep frequently ordered equipment in stock, the Levi Rehabilitation Unit at St. Joseph Regional Health Center in Hot Springs, AR, has saved staff time, eliminated the need to store equipment, and kept costs down for patients.
In the past, the rehab unit kept a stock of pre-made splints and activities of daily living equipment, such as reachers and dressing aids, and sold them to the patients when they were needed. Most of the items are not covered by Medicare.
Now, a local medical supply company keeps a minimal supply of the frequently used items, based on the hospital’s projected monthly use. A few days before a patient is being discharged, the therapist calls the company, which delivers the equipment the next day.
By using the new system, the hospital avoids the manpower costs of stocking, inventory control, and shipping and receiving costs. No longer does it have to pay for the items long before they are resold to patients. Overnight delivery charges for items that aren’t in the hospital stock are a thing of the past.
Patients benefit because they are purchasing directly from the vendor, rather than being charged through the hospital system.
"And, when it’s time to do the budget, we don’t have to hassle with that part," says Steve Carr, OTR/L, director of rehabilitation services at the 26-bed rehabilitation unit.
Before implementing the new system, the therapy staff made a list of the items most frequently used and charged them to the patient.
Carr’s staff gathered information from purchasing records and estimated how many of each item they would likely order each month. They contacted a local vendor and promised him the business if he would stock the items for Levi Rehabilitation.
The vendor was delighted because of the prospect of ongoing, regular business and "bent over backwards" to accommodate the hospital, Carr says.
The vendor conducted an inservice training session, with a catered lunch, to familiarize the staff with the equipment. It has also printed up price lists that the therapists use to show the patients what the cost of the equipment will be.
There are no figures on the savings yet, but Carr has concluded that "over a year’s time, we will save a significant amount of money and human resources."
But, he adds, the patients who often must pay for the equipment out of their own pockets will see the greatest savings because the equipment is not billed through the hospital system.
"There’s a lot of talk about holding down the cost for medical services. We feel that the bottom line is to hold the cost down to the patient, and that’s what we have done," Carr says.
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