The Inventory Diaries, Part 1 by Rebecca Johnson, Senior Field Manager
The alarming rate of expired products we encounter while performing inventories at hospitals
3 Minute Read – Often, before my team and I go in to conduct inventory services at hospitals, I speak to the supply chain manager. Most are quick to assure me that we won’t find expired inventory during counts at their facilities but that is not always the case.
Dozens of Expired Items
We recently conducted inventory services at a 2,000-bed health system. During the count, we found dozens of expired items that amounted to nearly $200,000 worth of inventory. The existence of expired inventory increases the chances the inventory could be used in practice, which often leads to lawsuits and litigation.
At another facility, a 500-bed hospital, we were performing inventory services as part of a sale. There, we found a huge amount of expired stock (valued at nearly $65,000) in the operating room.
At a third facility, an approximately 150-bed hospital, we found several expired products in the walk-in. This hospital was anticipating an inspection from The Joint Commission any day, so leadership was extremely relieved that we found and pulled the expired products in time.
Signs of Larger Problems
These aren’t the only facilities in which my team has come across significant amounts of expired supplies, and they won’t be the last. We see issues like this routinely, which is particularly concerning given the serious consequences that could arise from expired supplies.
Expired medical surgical and pharmaceutical products and supplies are a huge safety problem for patients, a huge risk and compliance problem for hospitals and carry a financial impact.
Large amounts of expired products also tend to indicate that the hospital has greater supply chain management challenges. These hospitals likely aren’t tracking supplies as effectively and efficiently as they should be. As a result, they are wasting an enormous amount of time and money. When hospitals aren’t able to determine how much inventory they need, they purchase too many supplies, and often those supplies expire before they can be utilized.
Millions in Savings Unrealized
Recent Guidehouse research underscores just how much supply chain management missteps are costing hospitals. The research found that most hospitals can reduce their expenses by 22.6%, or by $12.1 million annually per hospital, by improving their supply chain practices. Yet, most hospitals are coming up short. Only about 50% of hospitals are using supply chain management solutions that enable them to identify and managed expired supplies, according to a recent survey of 100 hospital supply chain leaders.
The good news is that more hospitals are recognizing the value of an optimized supply chain. Nearly 100% of respondents to that same survey said supply chain management is a moderate to high priority at their organization, and nearly 63% say it positively impacts costs.
As more hospitals recognize the value of improved supply chain management, I’m optimistic about the future. I hope that as my team continues to conduct inventory services within hospitals, we begin to see the amount of expired inventory trending downward, and as a result, we begin to see healthier patients and healthier hospitals.