Shared responsibility can help cut your supply costs

New management view stresses team-sharing

The cost of a pair of surgical gloves probably means nothing to the nurse who slips on a new pair 10 times a day. But those gloves as an expense item mean a great deal to you. So why not share that responsibility with others?

That’s the view held by some in critical care. If your staff knew what those gloves and hundreds of similar items cost each day, they would be more apt to help in managing those costs, says Laurie Shiparski, RN, MS, a former critical care nurse who is now a practice specialist with CPM Resource Center, a consultant in Grand Rapids, MI.

ICU supply costs rank among the highest in acute care. Exact figures aren’t available, but in general, these costs can range between 20% and 30% or more of every dollar earned by the unit per patient day, according to hospital industry sources. In comparison, general medical-surgical costs are about two-thirds of those amounts.

Yet, ICUs are among the least efficient in managing those expenses. Part of the reason is that medical supplies, items worth about $200 or less, get used up in large quantities in greatly different ways.

Clinicians in the ICU aren’t only using them more due to higher patient acuity, they use these items differently on different shifts, according to Connie Stewart, RN, MS, a nursing administrator who oversees nine critical care departments at MedCenter One Health System in Bismark, ND.

"In a 24-hour environment, it’s difficult to get people to use supplies in the same manner," Stewart notes. "And no one really cares about the majority of those items anyway because they’re usually paid under one DRG (diagnosis-related group) code."

Wastefulness adds to costs

Consequently, everything from suction tubes to pillows cases gets used and discarded from shift to shift without regard to how long they should last before being changed or the cost impact of the change, Stewart says.

But in budgeting, those costs mean everything to a manager. The solution, according to Shiparski, lies in risk-sharing. "Managers are putting too much time into budgets and finances, and they’re doing too much on their own," Shiparski says. Here’s what Shiparski and Stewart propose:

Make the staff cost-accountable

Information filters down to you from your central distribution and finance departments. Share that data with your nurses, Shiparski suggests. Managers usually shoulder the unit cost burden alone, mostly out of tradition and no other reason.

An open-book management approach to budgeting helps to get everyone involved in decision making, gives management important input, and creates team spirit. (See chart, p. 105, for guidelines.)

Set concrete targets and incentives

At MedCenter One, managers issued targeted cuts in supply usage and made the staff responsible for hitting the targets, says Stewart. In one year’s time, the units’ supply costs fell six percentage points from 37% to 31% due to everyone’s concerted involvement in the effort.

As an incentive, administration tied the nursing staff’s yearly salary increases to any demonstrated resource utilization efficiencies. Nurses get a 2% pay increase on top of any other raises during their annual review, Stewart says.

Enlist administration’s help

The data you obtain from finance and central supply tell administrators a lot about your unit’s budget. Request that information, but ask for it in meaningful terms, Shiparski suggests.

Their computerized information systems can break out your quarterly or annual costs by FTE (full-time equivalent) employee, by payer (Medicare or Medicaid), or unit service, patient day, or in margins (costs as a percentage of patient revenue). Then share this data with your staff, Shiparski says.

Get the word out

In meetings and newsletters, give staff details of the unit’s monthly and quarterly supply-cost data, emphasizing the importance of shared accountability. The message should be, "It’s everyone’s responsibility to conserve," Stewart says.

Post the information on the unit bulletin board and assign a member of the night shift to brief the night staff verbally on budget issues. Let everyone know what it costs each time a new intravenous tube or other item is installed on a patient.

Make the information meaningful

When making a supply item change or reporting new budget constraints to the staff, keep the information clear and logical. For example, explain the need for new policies regarding changing a catheter needle on patients by adding to the explanation information about the effect frequent changes may have on patient outcome, says Stewart. When the staff understands the implication of any new policy on patient well being, they are more likely to appreciate the explanation, she adds.

Offer simple alternatives

Supplies could run the gamut. At Stewart’s facility, Styrofoam cups became a thorny issue. "We were finding them everywhere," she says. Managers urged the staff to bring in their own coffee cups. The change would help keep the unit clean and save a few dollars.

Though small, the savings were important. But the effort worked because the clinical staff saw the alternative as thrifty and sensible, and it was something they could do easily, Stewart says.

Do some consensus testing

When adopting a new supply item, conduct your own mini-clinical trial. The hospital’s product evaluation committee has probably already made up its mind on switching to a new brand of suture or secretion tube. But no one has asked your nurses, the direct users of the new item.

Poll your staff regarding its ease and effectiveness, Stewart advises. They can give you input that you can use in feedback to the committee regarding the item’s value as an investment.

And when changing supply items, post the cost-comparison data where staff can view them. Add to the data descriptions such as the expected life of the product, its particular uses, and expected effect on patients. Central supply officials can help you develop the information.

Supply costs are always subject to the ebbs and flows of uncontrolled factors such as patient census, acuity, transfers, and bed capacity, says Shiparski. But managers typically account for these factors when trying to manage expenses.

But there’s still considerable room to cut fat, and much of what passes as inevitable can be traced back to wasteful habits. "What’s important is that managers not try to go it alone on this. Cutting costs is a shared responsibility," she says.