Healthcare News & Insights

Hospitals wasting millions due to unused supplies

Managing supplies effectively is critical to avoiding waste in hospitals. Unfortunately, many facilities aren’t tracking their medical supplies as closely as they should be, and that’s created a huge surplus of medical goods that often go unused. 

As discussed in a ProPublica piece, hospitals across the country are throwing away thousands of dollars’ worth of all kinds of medical devices and supplies, including gauze, surgical masks and urethral catheters. Much of the equipment is still perfectly usable – and nowhere near its expiration date.

Overall, the U.S. healthcare system wastes approximately $765 billion each year, per figures from the National Academy of Medicine. A significant portion of this is likely due to costs of wasted medical equipment and supplies. Researchers at one California hospital estimated that its neurosurgery department alone wasted almost $3 million dollars in supplies during a one-year period.

Multiply that by hundreds of hospitals and thousands of departments, and costs start adding up. In fact, it’s likely that this ignored equipment plays a big role in driving up hospital costs for the long-term.

And once equipment’s been ordered, facilities can’t do much with it if it’s not used up right away. In some cases, it’s tossed out when patient rooms are cleaned as an infection prevention guideline. And in others, it’s disposed of after hospitals sign new contracts with vendors.

Waste not, want not

One former nurse administrator saw how many supplies were wasted in the hospital where she worked, and she decided to do something about it. Elizabeth McLellan created a nonprofit organization, Partners for World Health, that collects medical supplies and equipment from hospitals that would otherwise throw it away.

McLellan and a team of volunteers box up the equipment and send it to various hospitals in developing countries, which use it to provide life-saving services to patients.

While McLellan’s efforts are an excellent example of finding a positive solution to the abundance of medical supplies sitting unused in hospitals, it’s not solving the root problem. Many hospitals need to get a better idea of the supplies they’re actually using and take steps to reduce waste.

It’s important for facilities to have a set process in place for supply chain management that accurately tracks how supplies are used. Using automated supply management systems that count inventory and notify staff when orders are needed makes this process even easier to handle.

Another helpful idea is to offer providers incentives to reduce waste. At the California hospital that wasted millions on supplies in one department alone, researchers decided to offer each department a financial bonus if staff reduced costs by at least 5%. They encouraged doctors to specify how the operating room should be set up before any surgeries, and if providers didn’t mention they needed certain supplies, those supplies weren’t placed in the OR.

Because of their efforts and feedback, surgical supply costs dropped by 6.5% for the group of participating providers. The savings amounted to approximately $836,000 in a year, while a control group’s costs rose by 7.5%.

So it’s not only helpful for hospitals to improve how well they manage their supplies, it’s also beneficial to get clinical staff proactively involved with any initiatives designed to cut costs.

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