Featured Research

from universities, journals, and other organizations

Better inventory management systems can reduce operating room costs

Date:
October 31, 2013
Source:
University of Arkansas, Fayetteville
Summary:
Health-care supply chain researchers conducted a major study of three hospitals and found that adoption of advanced inventory management systems can significantly reduce costs associated with medical and surgical items used in operating rooms.

Health-care supply chain researchers at the University of Arkansas, in a study of three hospitals within the Mercy network, have found that adoption of advanced inventory management systems can significantly reduce costs associated with medical and surgical items used in operating rooms.

The study, released by the Center for Innovation in Healthcare Logistics and funded by Covidien Inc., a health-care products manufacturer, focused on medical and surgical items used at Mercy hospitals in Fort Smith, Ark., Springfield, Mo., and Oklahoma City. Their analysis showed that holding costs associated with a high stock inventory contributed most to inefficiencies.

In 2010, health-care expenditures in the United States reached $2.6 trillion, nearly 10 times the $256 billion spent in 1980. Hospital care and clinical services account for roughly half of the nation's health expenditures. According to another research study, supply chain costs may account for as much as 40 percent of the cost of providing care, and it is estimated that if demand and inventory were better managed, cost savings could range from 6 percent to 13.5 percent of total health-care costs.

The Arkansas researchers analyzed inventory and procurement practices at each hospital and evaluated the potential for cost savings. They applied an advanced inventory management system driven by actual usage data and found that it forecasts demand better than traditional methods of ordering and replenishing.

"Because of intermittent or so-called 'lumpy' demand, procurement and supply-chain managers struggle with how many items to order," said Manuel Rossetti, professor of industrial engineering and lead author of the study. "Traditional methods of modeling and forecasting are not sufficient. Our implementation of an advanced forecasting technique showed much greater efficiency with a majority of the items at each location. Of course, the implication is that vital items are fewer in nature -- not as many held in stockrooms, for example -- and adoption of inventory best practices on these items may generate considerable savings."

The researchers studied supply-chain processes on a total of 370 items -- 119 at Fort Smith, 103 at Oklahoma City and 148 Springfield -- made by Covidien. They focused on items within Covidien's medical/surgical category, which includes diagnostic equipment and monitors, instruments such as clamps, scalpels, needles and suction tubing; and other general products such as latex gloves, towels, trays and sponges. Usage data on these items were extracted from software over a 578-day period, from October 1, 2010, to April 30, 2012.

The research team found that savings and cost reductions can be achieved by implementing advanced inventory management systems that would result in less inventory on hand while still fulfilling demand for items. Overall, the researchers analysis showed that forecasting was better for 61 percent of all items at the Fort Smith hospital, 65 percent of all items at the Oklahoma City hospital and 71 percent of all items at the Springfield hospital.


Story Source:

The above story is based on materials provided by University of Arkansas, Fayetteville. Note: Materials may be edited for content and length.


Cite This Page:

University of Arkansas, Fayetteville. "Better inventory management systems can reduce operating room costs." ScienceDaily. ScienceDaily, 31 October 2013. <www.sciencedaily.com/releases/2013/10/131031090034.htm>.
University of Arkansas, Fayetteville. (2013, October 31). Better inventory management systems can reduce operating room costs. ScienceDaily. Retrieved April 25, 2014 from www.sciencedaily.com/releases/2013/10/131031090034.htm
University of Arkansas, Fayetteville. "Better inventory management systems can reduce operating room costs." ScienceDaily. www.sciencedaily.com/releases/2013/10/131031090034.htm (accessed April 25, 2014).

Share This



More Health & Medicine News

Friday, April 25, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Deadly Fungus Killing Bats, Spreading in US

Deadly Fungus Killing Bats, Spreading in US

AP (Apr. 24, 2014) A disease that has killed more than six million cave-dwelling bats in the United States is on the move and wildlife biologists are worried. White Nose Syndrome, discovered in New York in 2006, has now spread to 25 states. (April 24) Video provided by AP
Powered by NewsLook.com
Companies Ramp Up Wellness to Lower Health Costs

Companies Ramp Up Wellness to Lower Health Costs

AP (Apr. 24, 2014) That little voice telling you to exercise, get in shape and get healthy is probably coming from your boss. More companies are beefing up wellness programs to try and cut down their health care costs. (April 24) Video provided by AP
Powered by NewsLook.com
Blood From World's Oldest Woman Suggests Life Limit

Blood From World's Oldest Woman Suggests Life Limit

Newsy (Apr. 24, 2014) Scientists say for the extremely elderly, their stem cells might reach a state of exhaustion. This could limit one's life span. Video provided by Newsy
Powered by NewsLook.com
FDA Wants To Ban Sales Of E-Cigarettes To Minors

FDA Wants To Ban Sales Of E-Cigarettes To Minors

Newsy (Apr. 24, 2014) The Food and Drug Administration wants to crack down on the use of e-cigarettes, banning the sale of the product to minors. Video provided by Newsy
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:

Breaking News:
from the past week

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile: iPhone Android Web
Follow: Facebook Twitter Google+
Subscribe: RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins