Optimizing Automatic Dispensing Cabinets For Cost-Savings
Revenue streams are not what they used to be for hospitals and health systems, and all cost-reduction goals should aim to close the shortfall as much as possible. Staffing models and labor costs often come to mind first, as executives struggle to reduce overhead. However, there are more subtle cost-savings measures that often go unnoticed. Such as the inventory reduction of medications sitting in automatic dispensing machines.
With the advent of automatic dispensing cabinets (ADC), there are challenges and issues that require regular attention. Expiration dating of medication, rotation of the stock, refills, and optimization of inventory are to name just a few.
Inventory optimization can be a tricky business; however, the payoff can be immense. Larger facilities can have upwards of a million dollars of medication inventory stored in ADCs throughout the institution. With the current healthcare climate, organizational cash flows are stressed, and optimized Pharmacy management can help to relieve some of that burden. For instance, in each ADC, the amount of medication used and refilled is a measure of labor efficacy and inventory turnover. However, reducing the physical inventory too much can result in stock-outs and additional labor to restock too frequently. The use of available ADC software reporting tools is a great way to begin the optimization effort. Targeting inventory that has not been used in the past 90 days and evaluating high-cost medications can be an easy way to start. The management of this inventory is also complicated by expiration dating, stock rotation, critically required medications, and the frequency of medication administration. Unfortunately, there is not a magic formula that fits each individual’s situation.
Curious how ineffective inventory management with your ADCs can affect your bottom line? View our FREE Labor Cost Calculator to view in numerical values the amount your health system is spending and if that is effective or burdening your bottom line.
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