Control supply costs through automation

On-line orders and direct shipping effective

Directors of supply management for home health agencies face a different set of challenges than do supply management directors for hospitals, but the rewards of an effective system to control supply costs can be significant, say experts interviewed by Hospital Home Health.

Supply management in a home health environment requires more advanced planning on the part of the nurse, points out Billie H. Waldo, RN, MS, vice president and general manager of the Extended Care Solutions Group of McKesson Information Solutions in Springfield, MO. "The field nurse can’t just walk down the hall to a supply closet when she needs supplies, so she needs to know that the supplies are in the patient’s home or in her car," she explains. Family and patient involvement in care also affects supply management because the nurse does not control the supply use between visits, she adds.

There are several ways to streamline supply management in home health to increase efficiency and reduce costs, Waldo states.

Automation of supply management is the answer for many agencies, she says. Not only can automation decrease the amount of staff time needed in the ordering and inventory control process, but formularies created during the automation process also can keep costs down, Waldo explains.

The savings in staff time after the Visiting Nurse and Hospice Service of Southwest Michigan in Kalamazoo was the equivalent of 40 hours per month of clerical time, says Lori L. Shifferd, director of the agency’s information systems.

Although no job positions were eliminated, the employees who previously spent this time on supply management now are available to support other areas, she adds.

Shifferd’s agency chose McKesson to provide the supply management piece of their system because the agency already was using McKesson software for other areas.

"It was simple to add this piece of automation because we were already accustomed to automated documentation that fed into our billing system," she says. (For information on software vendors, see box, below.) Even with the familiarity with computerized documentation, there was still of feeling of "will this really work?" she adds.

Supply Management Software

These companies offer software for supply management. Prices vary according to services purchased and size of organizations:

• McKesson Information Solutions, 1550 E. Republic Road, Springfield, MO 65804. Phone: (800) 800-5403. Fax: (417) 874-4015. Web: Click on Information Solutions, then choose products and services, and click on homecare.

• Byram Healthcare. Phone: (877) 902-9726. Web:

• Medline Industries, One Medline Place, Mundelein, IL 60060. Phone: (800) 633-5463. Fax: (800) 351-1512. Web:

• Sterling Medical Services, 2 Twosome Drive, Moorestown, NJ 08057. Phone: (800) 291-8500. Web:

Standardize supplies for savings

The first step in automating a supply management system is to develop a formulary of products appropriate for the agency and its typical clients, Waldo notes. "By standardizing the supplies within a formulary, nurses can’t order nonstandard supplies that don’t correlate to billing codes and may not be readily available in the agency’s geographic area." A formulary streamlines the ordering process and enables the agency to monitor costs, she adds.

The supply order form is on the nurse’s laptop and pops up as the nurse completes documentation on each visit, Shifferd states. "As we become more virtual, we become more accustomed to doing things on-line, but initially the use of the order form required a behavior change for all of our nurses," she admits.

The greatest change of behavior was submission of orders no later than 3 p.m. to ensure timely shipments of supplies to patients, Shifferd says. Because the supply management system enables direct on-line order of supplies by the agency and shipment directly to the patient’s home, timely submission is important, she adds.

"One thing we learned early in the process was that we needed to think ahead about holiday weekends," she points out. "If we have a holiday approaching, we send a message to all of our field staff reminding them to place supply orders early enough for delivery before the holiday if the patient will need supplies," she explains. "We also allow nurses to telephone the person responsible for placing the on-line orders if there is an emergency need for supplies," Shifferd adds.

In general, supplies are shipped from the warehouse twice each week, she points out. Supplies that are not critical to patient care, or that nurses don’t immediately need, such as educational forms and other paper supplies, are shipped in bulk to the agency office where they are placed into the nurses’ cubbyholes. "Nurses come into our office for mandatory meetings twice each month. They know to check their cubbyholes for notices, supplies, forms, and other materials," Shifferd continues. This cuts down on some shipping costs for the agency.

By having the supplies shipped directly to the patient’s home, nurses don’t have to go to the office outside of the mandatory meetings, she notes.

"We even ship supplies that the nurses need to carry directly to their homes if they have run out," Shifferd explains. This cuts the cost of travel reimbursement for the field staff, she adds.

Another advantage to shipping directly to homes as the supplies are needed, is that it makes it unnecessary for agencies to keep a large stock of supplies that take up space or to throw out supplies on which expiration dates have passed, Waldo points out.

"In fact, one agency with which we work reports an annual savings of $20,000 in both clerical time and cost of supplies," she says.

"We keep one-half of the amount of stock we previously kept in house," Shifferd explains. "We do keep three cases of normal saline, along with lab vials, gloves, catheters, and general supplies."

Automating a supply management process does not add any costs for most agencies, points out Waldo. "You do need an Internet access line for the ordering process, but no special hardware is needed," she says.

At Shifferd’s agency, the clinicians complete the order form on their laptops and then send it over a phone line to the clerk responsible for on-line ordering. The clerk then sends the order to the supply house with which McKesson contracts, she says.

Shifferd likes having the supply house account manager available to offer advice on cost trends of the agency, new products that the agency might want to evaluate, and formulary changes that might improve efficiency as well as patient care. "Not only does the account manager evaluate prices but she also makes sure our formulary meets national standards of care for different types of patients, such as wound care patients," she adds.

When evaluating systems, be sure to look for reporting features that enable you to look at supply costs per patient as well as per diagnosis, Waldo suggests. An automated system collects a tremendous amount of data, and you should be able to manipulate it to produce reports that are truly useful to your specific needs, she adds.

Even though the training required prior to the implementation of the system was about half a day of time, make sure that your nurses are well-prepared to utilize the system, Shifferd says. "It took some time to change the way everyone behaved, but it was worth the effort when we look at our improved efficiency and our cost savings."

[For more information about automating supply management systems, contact:

  • Billie H. Waldo, RN, MS, Vice President and General Manager of Extended Care Solutions Group, McKesson Information Solutions, 1550 E. Republic Road, Springfield, MO 65804. Phone: (800) 800-5403, ext. 4016. Fax: (417) 874-4015. E-mail:
  • Lori L. Shifferd, Director of Information Services, Visiting Nurse and Hospice, 348 N. Burdick Road, Kalamazoo, MI 49007. Phone: (269) 382-8001, ext. 3090. E-mail:]