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 September 21, 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 September 21, 2014).

Share This



More Health & Medicine News

Sunday, September 21, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Sierra Leone's Nationwide Ebola Curfew Underway

Sierra Leone's Nationwide Ebola Curfew Underway

Newsy (Sep. 20, 2014) Sierra Leone is locked down as aid workers and volunteers look for new cases of Ebola. Video provided by Newsy
Powered by NewsLook.com
Changes Found In Brain After One Dose Of Antidepressants

Changes Found In Brain After One Dose Of Antidepressants

Newsy (Sep. 19, 2014) A study suggest antidepressants can kick in much sooner than previously thought. Video provided by Newsy
Powered by NewsLook.com
Could Grief Affect The Immune Systems Of Senior Citizens?

Could Grief Affect The Immune Systems Of Senior Citizens?

Newsy (Sep. 19, 2014) The study found elderly people are much more likely to become susceptible to infection than younger adults going though a similar situation. Video provided by Newsy
Powered by NewsLook.com
Jury Delivers Verdict in Salmonella Trial

Jury Delivers Verdict in Salmonella Trial

AP (Sep. 19, 2014) A federal jury has convicted three people in connection with an outbreak of salmonella poisoning five years ago that sickened hundreds of people and was linked to a number of deaths. (Sept. 19) Video provided by AP
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