Navigating Inventory Management in Specialty Physician Practices
Physician practices are increasingly turning to technical
solutions to help them strike the difficult balance of maximizing efficiencies
and lowering costs while improving care quality. And inventory management is
one area technology can make a considerable impact. Automating these
traditionally manual, labor-intensive processes enables practices to streamline
workflows, better allocate crucial resources, maximize cash flow and establish a
new level of operational visibility that ultimately improves the bottom line.
Here are some common questions – and answers – to help you understand the advantages of an inventory management solution.
What will inventory management technology really do for me?
- Eliminate the spreadsheets, sticky notes — and a lot more: Costly medications are too
valuable to track manually when the process can be automated with exacting
precision. That means less human error, fewer billing and payment discrepancies
and staff freed up to focus on more critical tasks. And greater visibility into
drug flow, which can reduce product loss.
- Ensure you have exactly what you need, when you need it – in real time: Imagine being able to see on a
computer screen at any moment what medications are on hand at your practice –
or multiple practice locations – and reconciling that with the patients
scheduled to receive them, with the click of a mouse. No more manual counts or
calling satellite offices for inventory updates.
- Right-size on-hand supply, control costs and optimize billing: Stocking too much medication can result in product loss and cash flow disruptions. It also raises the challenge of ensuring that the product ordered was administered to the right patient, billed for appropriately and that payment was received. An inventory management system can reduce the amount of drug on hand and fine-tune purchase frequency to simply and efficiently overcome these obstacles.
How can I tell if an inventory management system is a good idea for my practice?
If your practice purchases a moderate-to-high volume of medications – particularly expensive biologics – with no efficient system in place to accurately track drug-in/drug-out, it’s time for some serious self- examination. Here are a few suggestions:
- Compare your drug units purchased versus drug units billed for any given period
- Measure billable units against payments for units billed
- Analyze your current accounts receivable and cash flow
- Review unpaid claims and/or resubmission
If this homework reveals numbers that are inconsistent
and unbalanced, it’s time to investigate a system that can stabilize them by
improving visibility and increasing accuracy.
What should I look for in an inventory management system?
Asking these questions can help lead you to the right inventory management solution:
- Is it specifically designed for medical practices?
There are various inventory management solutions out there. Unfortunately, few of them have been developed especially for physician practices. It’s important to identify one that can manage the unique combination of clinical and business needs medical practices must address. Investigate whether the technology can help manage things like business analytics, dispense workflow, purchase order processing and other practice-related workflows.
- Can it integrate with other technologies?
Healthcare reform and related mandates seek to eliminate disparate technical platforms that can’t communicate with each other. Why create a problem you’re eventually going to have to solve? If your organization utilizes an electronic medical record and/or practice management system (or plans to), be sure that the inventory management solution you choose can play nice with them, and vice versa.
- Is the technology proven and the vendor reputable?
An overburdened physician practice can’t afford to serve as a test site for a technology start-up’s pet project. Save some headaches and find a system (and vendor) with an established, proven track record. Ask how long the solution has been around, is the solution focused on specific specialty physician needs, how often software updates are released and what the product development pipeline looks like. These are all key indicators of a vendor’s investment in and commitment to a quality product.
- What else does the vendor bring to the table?
Some inventory management solutions providers will deliver the software you need, and that’s it. Look for one that’s diversified and experienced and can offer related value-added services. For example, a vendor that has partnerships with pharmacies and distributors can leverage those to further streamline inventory processes and maximize efficiencies.
Amid changing regulations and demanding new mandates, medical practices are under increased pressure to achieve optimal operational and financial control. Inventory management is essential to these efforts. Automating the process with the right solution can provide a new level of transparency into inventory and payment reconciliation and serve as the foundation for measurable, sustainable success as healthcare continues to evolve.
Inventory Management Technology as the Hub of a Fully Integrated Specialty Practice Solution: Part One
Modern inventory management systems are far more than fancy medication cabinets. They've been re-imagined for modern medicine, where complex and expensive pharmaceuticals often prove key to better outcomes at lower costs.