Linens, Patient Apparel, And Hospital Acquired Scrubs And Uniforms
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Transcript of Linens, Patient Apparel, And Hospital Acquired Scrubs And Uniforms
Translating Your Hospital’s Data into Translating Your Hospital’s Data into SCMetrix™ FormatSCMetrix™ Format
Vicki Smith-Daniels, Ph.D.Vicki Smith-Daniels, Ph.D.Department of Supply Chain ManagementDepartment of Supply Chain Management
Contact Us: Contact Us: [email protected]
AgendaAgenda
How to translate data into the required SCMetrix™ How to translate data into the required SCMetrix™ format format
Strategies for making informed decisions on which Strategies for making informed decisions on which level of benchmarking is most appropriate for your level of benchmarking is most appropriate for your hospital hospital
How to make an informed decision on whether to How to make an informed decision on whether to estimate a data field or insert a missing value estimate a data field or insert a missing value indicator. indicator.
Specific procedures for estimations; common Specific procedures for estimations; common conversion problems will be covered through conversion problems will be covered through illustrative examples illustrative examples
Suggestions on how to collect additional data in Suggestions on how to collect additional data in the futurethe future
Benchmarking ParticipationBenchmarking Participation
1Facility
2Departments & Service Lines
3High Supply
Intensity, High Volume DRGs (Optional)
Total Supply Expense Total Purchased ServicesRevenue Total Non-Labor ExpenseAdj Operating Exp Rebates
Surgical Pharmacy Diagnostic RadiologyOutpatient Oncology Clinical LaboratoryEmergency Obstetrics Dietary Orthopedic Cardiac Cath Interventional Radiology
Surgical: Joints, Implants, Stents, etc. Medical: Respiratory, Infections, etc.
SCMetrixSCMetrixTMTM Data Collection Toolkit Data Collection Toolkit
Review all tabs from left to right Record data in spreadsheet
Online submission of hospital profile Online submission of financial, operational, and supply chain structure
Data DefinitionsProvided in Spreadsheet
GuidelinesGuidelines
Follow AHRMM-HFMA supply expense definitionFollow AHRMM-HFMA supply expense definition Include all supply expenses for which your hospital Include all supply expenses for which your hospital
receives revenuesreceives revenues• Inpatient, Outpatient, and EmergencyInpatient, Outpatient, and Emergency
Allocate supply expenses in the department in which Allocate supply expenses in the department in which they were usedthey were used
If actual data is not collected for a specific If actual data is not collected for a specific department /service line department /service line • Estimate data fields when departments/services lines are Estimate data fields when departments/services lines are
either significant revenue drivers and/or high supply either significant revenue drivers and/or high supply expenses areas.expenses areas.
• Input missing value when some department/service line data Input missing value when some department/service line data is not available and/or cannot be estimated is not available and/or cannot be estimated
Adoption of the Industry StandardAdoption of the Industry Standard
Standard Supply Expense DefinitionStandard Supply Expense Definition
The net cost of all tangible items that are expensed including freight, The net cost of all tangible items that are expensed including freight, standard distribution cost, and sales and use tax minus rebates. This standard distribution cost, and sales and use tax minus rebates. This
would exclude labor, labor related expenses, and services as well as some would exclude labor, labor related expenses, and services as well as some tangible items that are frequently provided as part of service costs. tangible items that are frequently provided as part of service costs.
SCMetrix™ benchmarks Total Delivered CostSCMetrix™ benchmarks Total Delivered Cost
Customizing Your HospitalCustomizing Your Hospital
Every hospital has these departments in SCMetrix™
•Clinical Laboratory• Housekeeping• Inpatient Pharmaceutical• Inpatient Surgical
Identify only departments/service linesfor which you will be providing data
QuestionsQuestions
Continue to send your questions Continue to send your questions through the chat featurethrough the chat feature
Questions will be answered Questions will be answered throughout the webinarthroughout the webinar
ororResponses sent after the webinar Responses sent after the webinar
sessionsession
Case Studies
Community Hospital of Spartanland
Valley of the Sun Hospital
Napa Valley Medical Center
Hypothetical Case Studies
• General Ledger Codes • Different Data Types
• Frequently Asked Questions
Case Study
Community Hospital of Spartanland
Hospital Profile
63 Bed General Medical-Surgical Hospital Top 5 Service Lines By Revenue
• Obstetrics• Cardiovascular• General Medicine• Orthopedics• Respiratory
Departments/Services Offered at the Hospital• Emergency• Obstetrics• Orthopedic• Outpatient Services• In-house Dietary
Thoughts and Questions
I’m entering a maze with no end in sight
Can I benchmark with SCMetrix™? My hospital does not:
Allocate rebates to the actual spend Allocate rebates to the actual spend
Allocate freight to departmentsAllocate freight to departments
Collect inventory data in all departments Collect inventory data in all departments
Level 1 Appears to be the Right Level of Participation
Spartanland’s Information Sources
Product CategorySupply Expense
Reports
Financial Statements
DRG Reports
Procedure Data
AHA Annual Survey
Rebate Reports
Department Managers
SCM Manager
Distributor Representative
Financial
Operational
Supply Chain Structure
HospitalProfile
Goal
Total Facility Supply Expense: ComponentsTotal Facility Supply Expense: Components
Components • Surgical Supplies• General Medical• Drugs/Pharmaceutical• Lab Supplies• Oxygen and Related Medical Gases• Radiologic Films and Chemicals• Dialysis Supplies and Fluids• Linens, Patient Apparel, and Hospital-
Acquired Scrubs and Uniforms• Dietary Products• Housekeeping/Cleaning Supplies• Office Supplies• Freight Associated with Any Supply Item• Standard Distribution Fees• Supply Component of Outsourced
Contracts• Supply Component of any Equipment
Rental or Lease• Sales Tax• MINUS: Rebates
Make Total Facility Supply
Expense as accurate as possible
• Exclude specific supply expenses
• Input Actual or Estimate for each component
• SCMetrix™ automatically calculates total supply expense based on the data fields
Supply Definition from AHRMM/HFMA
Tot
al F
acili
ty S
uppl
y E
xpen
se
Translating Into Supply ComponentsTranslating Into Supply Components
Guidelines:
1. All product supply/price data should be allocated into a supply expense category
2. If appropriate category cannot be identified, assign to General Medical Supplies
3. If product supply data includes acquisition price, freight, and distribution fees, then record total amount in category
Computing Total Delivered CostComputing Total Delivered Cost
Guidelines:
1. Provide total freight and distribution fees if not included in product supply/price data.
2. Include sales tax based on state policies for goods and service purchases.
3. Include rebates for all purchases made during the benchmark period.
Calculating RebatesCalculating Rebates
1/1/07 7/1/07 1/1/08
Goods Purchased
RebateReceived
RebateReceived
RebateReceived
Guideline:Report rebates associated with the spend during the benchmarking
periodEstimation:
Sum actual rebates received during the benchmarking period plus pending/projected rebates
or Estimate total rebates using actual average rebate rate of your total
spend on contract for 2007
Department Supply Expense Data CollectionDepartment Supply Expense Data Collection
Total Delivered CostFor Dept Supply Usage
Including
Dept Specific SuppliesGeneral Medical Supplies
Office SuppliesFreight
Standard Distribution FeesSupply Component of
Rentals/LeasesSales TaxRebates
Department Freight Example: Clinical LabDepartment Freight Example: Clinical Lab
Available DataAvailable Data Spartanland does not collect freight at the department Spartanland does not collect freight at the department
/service line level/service line level All other clinical lab supply expense data availableAll other clinical lab supply expense data available
Estimating Freight ExpenseEstimating Freight Expense
1.1. Estimate facility freight as a percentage of total supply Estimate facility freight as a percentage of total supply expense : expense : Freight/Total Supply Expense = 1.2%Freight/Total Supply Expense = 1.2%
2.2. Clinical Lab Supply Expense Without Freight: Clinical Lab Supply Expense Without Freight: $200,460$200,460
3.3. Compute Freight Using the Following EquationCompute Freight Using the Following Equation Total Clinical Lab Supply Expense = Freight + $200,460Total Clinical Lab Supply Expense = Freight + $200,460 Clinical Lab Freight = .012*Total Clinical Lab Supply ExpenseClinical Lab Freight = .012*Total Clinical Lab Supply Expense Total Clinical Lab Supply Expense = $202,895Total Clinical Lab Supply Expense = $202,895 Clinical Lab Freight = $2,435Clinical Lab Freight = $2,435
Product Delivery DataProduct Delivery Data
Inventory TurnsInventory Turns
Central StoresCentral Stores
Central SupplyCentral Supply
Clinical LabClinical Lab
PharmacyPharmacy
Inpatient SurgicalInpatient Surgical
Inventory ValueInventory Value
Central StoresCentral Stores
Central SupplyCentral Supply
Clinical LabClinical Lab
PharmacyPharmacy
Inpatient SurgicalInpatient Surgical
Consignment Consignment Inventory Inventory
Clinical LabClinical Lab
PharmacyPharmacy
Inpatient SurgicalInpatient Surgical
On-Time OrdersOn-Time Orders
Central StoresCentral Stores
Central SupplyCentral Supply
Clinical LabClinical Lab
PharmacyPharmacy
Inpatient SurgicalInpatient Surgical
• Insert missing value 99999999999 (11-9’s)• Cannot benchmark these metrics
Revisiting Level of ParticipationRevisiting Level of Participation
Top 5 Service Lines By RevenueObstetricsCardiovascularGeneral MedicineOrthopedicsRespiratory
Departments/Services Offered at the Hospital
EmergencyObstetricsOrthopedicOutpatient ServicesIn-house Dietary
BenchmarkObstetrics
Total supply expenses for obstetrics INCLUDES surgical supplies, general medical supplies, drugs/pharmaceuticals, office supplies, freight, standard distribution fees, supply component of any rental or lease, sales tax MINUS rebates.
Service line supply expenses available for• Surgical supplies• General medical supplies• Drug/ Pharmaceuticals?
Yes, Yes, Include in the Hospital ProfileInclude in the Hospital Profile
QuestionsQuestions
Continue to send your questions Continue to send your questions through the chat featurethrough the chat feature
Questions will be answered Questions will be answered throughout the webinarthroughout the webinar
ororResponses sent after the webinar Responses sent after the webinar
sessionsession
Case StudyCase Study
Valley of the Sun Hospital
Two Critical Estimation Issues
Valley of the Sun Hospital provides extensiveValley of the Sun Hospital provides extensiveoutpatient servicesoutpatient services
Problem: Problem: Supply expenses for inpatient and outpatient Supply expenses for inpatient and outpatient services combined together in supply reportsservices combined together in supply reports
Valley of the Sun Hospital receives sizeableValley of the Sun Hospital receives sizeablerebates rebates
Problem:Problem:Rebates tracked at facility level and needs to be allocatedRebates tracked at facility level and needs to be allocated
to strategic department/services linesto strategic department/services lines
Estimating Outpatient Supply ExpenseEstimating Outpatient Supply Expense
Outpatient Supply Expense
Total supply expenses for outpatient services INCLUDES surgical supplies, general medical supplies, lab supplies, drugs/pharmaceuticals, dialysis supplies and fluids, office supplies, radiological films and chemicals, freight, standard distribution fees, supply component of any rental or lease, sales tax MINUS rebates.
Estimation Procedure:
1. Estimate the outpatient adjustment factor as the % of revenue from outpatient services• Outpatient Revenue/Total Revenue
2. Compute the adjusted supply expense facility • Remove oxygen, linens, dietary, and housekeeping supply
expenses3. Calculate Outpatient Supply Expense
• Adjusted Supply Expense * Outpatient Adjustment Factor
Other Methods: Inpatient and Outpatient
Estimate outpatient if greater than40% of revenue
Facility MetricsFacility Metrics
• Supply Expense Per Adjusted Patient DaySupply Expense Per Adjusted Patient Day
• Supply Expense Per Adjusted DischargeSupply Expense Per Adjusted Discharge
Facility Revenue Metrics
Net Inpatient Revenue Per Inpatient DaysOutpatient Revenue as a % of Patient RevenueOutpatient Revenue per Total Outpatient Visits
Allocating Rebates Across Departments: Allocating Rebates Across Departments: Inpatient Surgical ExampleInpatient Surgical Example
Available DataAvailable Data Facility rebates = Facility rebates = $146,000$146,000 Product category acquisition prices Product category acquisition prices
• Supply expenses minus freight, distribution, sales tax, and rebatesSupply expenses minus freight, distribution, sales tax, and rebates
Estimation ProcedureEstimation Procedure
1.1. Compute total facility acquisition spend for all categoriesCompute total facility acquisition spend for all categories Sum of surgical, general med, pharmaceuticals, lab, oxygen, radiological films, Sum of surgical, general med, pharmaceuticals, lab, oxygen, radiological films,
dialysis, dietary, linens, housekeeping and office supplies dialysis, dietary, linens, housekeeping and office supplies
2.2. Estimate inpatient surgical acquisition spend available for rebatesEstimate inpatient surgical acquisition spend available for rebates Calculations same as (1) but only for rebate-eligible inpatient surgical spend Calculations same as (1) but only for rebate-eligible inpatient surgical spend
3.3. Calculate inpatient surgical rebate estimation factor as % of inpatient Calculate inpatient surgical rebate estimation factor as % of inpatient surgical acquisition spend/total facility acquisition spendsurgical acquisition spend/total facility acquisition spend Inpatient surgical acquisition spend/total facility acquisition spend = 13.6% Inpatient surgical acquisition spend/total facility acquisition spend = 13.6%
4.4. Estimate inpatient surgical rebatesEstimate inpatient surgical rebates- Facility Rebates * Inpatient Surgical Rebate Estimation FactorFacility Rebates * Inpatient Surgical Rebate Estimation Factor- $146,000 * .136 = $19,856$146,000 * .136 = $19,856
QuestionsQuestions
Continue to send your questions Continue to send your questions through the chat featurethrough the chat feature
Questions will be answered Questions will be answered throughout the webinarthroughout the webinar
ororResponses sent after the webinar Responses sent after the webinar
sessionsession
Case StudyCase Study
Napa Valley Medical Center
Thoughts and IssuesThoughts and Issues
Full Implementationof Level 2
• Integrated Information System• Service Line Management
Issues:Issues:
• Products used in multiple deptsProducts used in multiple depts.
• General Medical products not General Medical products not allocated to all depts.allocated to all depts.
Issue #1: Assign Based on Where It Is Used
Departmental/Service Line Expenses• Put specific device cost in one place
- Cardiac Cath Lab Supply Expense (with Intervention), or
- Inpatient Surgery Supply Expense Total Cardiac Implant Supply Expense
• Sum all implants used in Cardiac w/ Intervention and Surgery
• INCLUDES implant purchase cost, freight, standard distribution fees, sales tax MINUS rebates
Hospital 3
Surgery
Hospital 2
Cardiacw/out Inter
Surgery
Hospital 1
Cardiacw/ Inter
Surgery
Example: Pacemaker
Implants
Assign to
loca
tion
used
Issue #2 : Allocate unassigned supply expenses as a percentage of the directly traceable departmental supply costs
Example: Assume that the cost of unassigned general medical supplies is $200,000 and that $800,000 in total facility acquisition spend was directly traceable to the following four departments/service areas.
General/Medical Supplies Rate = $200,000 / $800,000 = 25% of Direct Supply Cost
Facility Level Unallocated Acquisition Spend Allocation Rate Total Facility Acquisition Spend=
Inpatient SurgeryAssignable = $ 400,000
x 25%Allocated G/M = $100,000
PharmacyAssignable = $120,000
x 25%Allocated G/M = $30,000
EmergencyAssignable = $200,000 x 25%
Allocated G/M = $50,000
All Other Depts.Direct Cost = $80,000 x 25%
Allocated G/M = $20,000
Include only acquisition spend in the assignable supply expenses. Exclude freight, distribution fees, sales tax, and rebates in the assignable calculations.
QuestionsQuestions
Continue to send your questions Continue to send your questions through the chat featurethrough the chat feature
Questions will be answered Questions will be answered throughout the webinarthroughout the webinar
ororResponses sent after the webinar Responses sent after the webinar
sessionsession
Take Aways and Going Forward
Learning Curve: Data CollectionLearning Curve: Data Collection
1st Half 2007
Significant UpfrontInvestment in
IdentifyingData Sources
2nd Half 2007
Incorporate Data
Validation Feedback
1st Half 2008
AnticipateGreater Dept/SL
participation
2nd Half 2008
ProcessesIn Place
Take Away 1: Multiple Information SourcesTake Away 1: Multiple Information Sources
Product CategorySupply Expense
Reports
Financial Statements
DRG Reports
Procedure Data
AHA Annual Survey
Rebate Reports
Department Managers
SCM Manager
Distributor Representative
Financial
Operational
Supply Chain Structure
HospitalProfile
Take Away 2: Use Missing ValuesTake Away 2: Use Missing Values
If you want to benchmark some departments but do not have all If you want to benchmark some departments but do not have all data availabledata available• FinancialFinancial
• VolumesVolumes
• Inventory Inventory
Use the missing value data fieldUse the missing value data field• 11 – 9’s11 – 9’s
If you do not have department procedure data, there is little If you do not have department procedure data, there is little value in benchmarking that department/service linevalue in benchmarking that department/service line• Do not select the department/service line in the Hospital ProfileDo not select the department/service line in the Hospital Profile
If you are benchmarking at Level 1 and do not have the required If you are benchmarking at Level 1 and do not have the required department datadepartment data• Insert the missing value data fieldInsert the missing value data field
Take Away 3: Use Estimation ProceduresTake Away 3: Use Estimation Procedures
Allocating facility total delivered cost components to departments/service lines• Freight• Standard distribution fees• Sales Tax
Take Away 4: Not Included ExpensesTake Away 4: Not Included Expenses
Review supply expenses not included in the AHRMM-Review supply expenses not included in the AHRMM-HFMA definitionHFMA definition
Going ForwardGoing Forward
Send unanswered questions toSend unanswered questions to• [email protected]
Record estimation procedures in toolkit and Record estimation procedures in toolkit and submit to submit to [email protected]