7 Hospital Inventory Management Techniques to Reduce Costs

Updated on May 28, 2021

Healthcare is the lifeline of every nation’s economy. It requires rigorous efforts to sustain a constant flow in the hospital inventory while maintaining the annual expenditure. This job tests your competency for things ranging from organizational skills to financial management.  

With changing times and evolving technology, humans are receiving overwhelming support, which reduces their workload, increases efficiency, and sometimes even cuts down on costs. 

Here is a list of 7 hospital inventory management techniques that can help economically.

Educate the staff

Organization reduces last-minute hassle. You can begin the process by a small-duration training of staff. It should include inculcating skills for the proper arrangement of stocks in their correct place. Educate them about different details of the package, which determine the shelf life and usability of the medical product.

Designate labels or assign asset tags. Arrange the pharmacies on shelves according to their expiry dates so that they are sold accordingly and are notified for stock placement as per the situation.

Products related to the emergency department and urgent surgeries should be kept in a separate area for a consistent lookout. Everyone should be assigned a specific role. 

Track the flow

The inventory staff should be trained to evaluate the stock vs. the need of a product to assess the requirement. 

The supply chain is made up of a hierarchy of institutions that manufacture, approve, and deliver the products to the hospital. The employees should be trained to maintain constant communication between the federal agencies and the companies, to mediate the logistic process and early delivery of products. 

It is important to track the input and output flow in the inventory to avoid inconsistency and assure timely healthcare service to patients in need.

Implement IT

All thanks to engineers and scientists that have grilled hard to develop technological methods which reduce human efforts. IT tools such as hospital inventory management software should be incorporated into the system. This will automate the process and build a quick electronic database that makes it paperless and efficient.

Advanced tools such as RFID tags or barcodes should be designated on all products and equipment. These stores all data about their master product. Such digital tools increase the visibility of the product and also lets you track the last accessed instrument, by whom, and when. 

This virtual method reduces the chances of theft and mismanagement, notifies the admin on shortages issues, and places the order automatically when they hit the bottom limits of stock. It maintains sufficient stock and cuts down on the overhead expenses of excess orders.

Real-time updates about the products’ status in the logistics process can also be provided by these tools. Robo-advisers and chatbots guide the user in case of difficulty. This relieves off the inventory workforce, thus saving on budget.

Sensitive use of resources

A report published by the American Journal of Clinical Pathology has stated that in U.S laboratories and hospitals, repeated testing costs up to $5 million every year.  This can be avoided with judicious use of resources.

Diagnostic imaging, spot testing kits, and various routine tests should be prescribed selectively, and equitable distribution should be done among the patients. This reduces overuse and saves on extra expenses. 

Proper updates of the installation of heavy equipment in the departments should be maintained by cloud-based services and software. In cases of sudden breakdown or hiccups in working, the inventory is notified about the needful process. 

Timely maintenance and cleaning appointments for large diagnostic equipment should be fixed to increase longevity and avoid re-buying.

Transparent communication

The administrative and management department of hospital inventory should have clear communications about the budget. The supply chain leaders and logistics head should be well-versed with the urgencies of the hospital services.

The benefit of such transparent communication is the time-bound delivery of products without last-minute overhead charges. The up-to-date information about the stocks can help place orders in off-seasons when large discounts can be received on the products. 

A well-trained person with financial intelligence can help lower various unnecessary taxes imposed on the way of a product from manufacturing plant to supply facility.

Lean strategy

Lean strategy is a management method to avoid surplus supply and eliminate all points of waste production at their source.

From the triage site to the discharge of patients, there should be a reduction in non-value added services such as redundant testing, use of non-compulsive drugs, unnecessary operations, waste of catheters, and IV set due to wrong application. 

Short hospital stay will ensure reduced usage of resources on one patient and can be diverted to another person in need.

The whole process needs to be optimized to ensure customer satisfaction and inventory cost reduction.

Learn from partner industry

Though with different outcomes, all businesses run parallel to each other. The hospital inventory can integrate with the IT sector to digitize a large amount of data. 

It can take lessons from the experts of storing, space management, and logistics to improve the stocking methods and constant supply of products.

The Editorial Team at Healthcare Business Today is made up of skilled healthcare writers and experts, led by our managing editor, Daniel Casciato, who has over 25 years of experience in healthcare writing. Since 1998, we have produced compelling and informative content for numerous publications, establishing ourselves as a trusted resource for health and wellness information. We offer readers access to fresh health, medicine, science, and technology developments and the latest in patient news, emphasizing how these developments affect our lives.