A look at an "Iron Curtain" hospital and its purchasing department.
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Surging prices for supplies are intensifying the pressure on hospitals already reeling from skyrocketing liability, staffing and technology costs. The prices for certain supplies far outstrip general inflation and, executives say, could undermine the financial viability of some service lines. That's forcing some hospitals to rethink their purchasing strategies.
JUSTIFICATION: According to French regulations concerning the risk of Creutzfeldt-Jakob disease transmission, traceability procedures of all sterile medical devices which need to be reused are mandatory. Despite sterilization processes, the reusable laryngeal mask airway (LMA) prion disease transmission remains possible. As a result, the disposable LMA has been introduced. OBJECTIVE: Assuming clinical equivalence was achieved, the cost of disposable vs reusable LMA was studied in a university hospital. STUDY DESIGN: A Cost-minimization analysis of disposable vs reusable laryngeal mask airway was realised. METHODS: Disposable LMA cost was calculated as the sum of product cost and elimination cost. Reusable LMA were autoclaved after hospital purchasing in two separate sterilizing processing units of the same hospital. Reusable LMA cost was determined combining materiel and labor costs. RESULTS: The reusable LMA cost depended on the sterilizing processing unit concerned and varied between 9.59 Euros and 9.69 vs 8.38 Euros for the single-use LMA. CONCLUSION: With the cost savings made possible by use of disposable LMA in both labor and consumables, this practice should be considered.
Order processing and parts issuing are within the scope of an inventory management system and, as such, it was logical to incorporate the Purchase Order Management Menu into the biomedical engineering inventory management system. The Purchase Order Management function was implemented using the services of a biomedical engineering technician who is a staff member. Software development time (two months) was the only resource that was necessary to incorporate this function into the inventory system. This function, implemented on a PC, provided locally functions that had not been available on the mainframe-based hospital purchasing system. These functions directly addressed the needs of the users, who in this case are the staff members of the department of biomedical engineering at University Hospital, Stony Brook, New York.
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The facsimile transceiver (FAX) was trialed at Beverly Hospital, Beverly Massachusetts, on the Intensive Care Unit and the Pediatric Floor from March 13 to April 27, 1987. Beverly Hospital is a 233 bed non profit community hospital. The facsimile unit was used to transmit medication orders to the pharmacy over existing telephone lines. The purpose of the trial was to determine the time saved between the writing of the medication order and the arrival of the medication on the nursing unit. This time was considered as medication turnaround time. During the trial period, a total of 1767 medication order sheets were processed via the FAX machine. The results of the trial showed that medication turnaround time has improved by an average of 90 minutes for each order placed. In addition, it was found that a total of 60 phone calls and 14 trips to the pharmacy, per day, were eliminated from both trial units combined. This resulted in an estimated time savings of 6.5 staff hours per day on these two units alone. On a hospital-wide basis, this would result in considerable labor savings for nursing staff on the floors. In addition, supply costs of medication order sheets will be reduced by approximately $3200 per year if the FAX units were used throughout the hospital. As a result of the trial, Beverly Hospital purchased 9 units, at a cost of $17,325 and implemented a hospital-wide policy of sending medication orders to the pharmacy using this equipment. This will result in improved ability of the pharmacy to respond to new orders in a more timely manner, supply cost reductions and improved use of staff.
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The Baxter Corporate Program's broad-based product offering and wide range of logistical services gives hospitals a "one-stop shopping" opportunity for supplies. Many hospitals like working with fewer vendors, but few suppliers have resources like Baxter's. So the industry asks: Is this really the way hospitals want to purchase?
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The German healthcare system offers a social network guaranteeing almost complete healthcare coverage to the German population (prevention, treatment, and rehabilitation). The system is supported by a multistructured network of public and private healthcare insurers. Fees for public insurance are equally paid by employers and employees. Healthcare expenditures heavily impact the salary levels of employees and, as a result, production costs of employers. About one third of all national healthcare spending goes to hospital care. In 1991, there were ICUs in half of all German hospitals; 3.2% of all hospital beds were ICU beds. As in most countries, the expansion in national healthcare costs in the last decade has become a serious problem in Germany. At total of 8.1% of the entire German gross national product is spent on health care, which has led to drastic governmental healthcare reform that began in 1993. The key points of this reform are: a) strict limitations on hospital budgets at 1992 levels including a new structure of hospital financing; b) controlled reduction of expenditures for medical drugs (which were formerly at the highest level in Europe); and c) controlled restriction of regional distribution for physicians. In a large German university hospital (1,461 beds; 91 ICU beds) expenses for intensive care medicine comprise about 12% of all hospital spending (5,356 deutsche mark/patient). More than 60% of these expenses are for personnel; 37% go toward drugs and medical materials. There are several possible starting points for cost containment in intensive care medicine in Germany: a) a task-adapted, countrywide diffusion of ICUs within the different levels of hospitals; b) a more selective provision of intensive care medicine (primary as well as secondary) to patients, depending on patient needs; c) a centralized and task-oriented admission and discharge policy; and d) cost containment in the use of drug therapy by centralized hospital purchasing and by establishing strict, rational, therapeutic principles. Some examples of the author's personal experience follow. In all German hospitals, expenses for personnel are about 60% to 70%. These expenses are fixed by official, standard wages. Cost containment by further restricting the number of personnel impairs the care provided. Improvements in organization and management may contribute to a higher degree of personal motivation for employees and, in turn, may result in higher working efficiency.
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