Does Your Hospital's Procure-to-Pay Process Include Demand-to-Destination?

By Sophie Rutherford

Many health systems have done a great job of focusing on "Procurement to Payment" (P2P)automation, however the “Demand to Destination” (D2D) workflow still contains significantly manual processes that today can be addressed with automation.  D2D becomes critically important because it’s a commonly overlooked area for cost disruption.
Healthcare supply chain professionals are tasked with tapping every opportunity in the healthcare system to identify savings – and they traditionally look toward supply utilization, contracting and logistics. So in the D2D workflow there remain opportunities, and implementing technology to support greater automation will create value, efficiency and savings. Today’s high tech solutions are instrumental in driving cost savings, and efficiencies that can be demonstrated by both hard and soft dollar savings.
Years ago, many in healthcare looked at the "materials management" functions as low cost, low value, and frankly, low opportunity areas for hospitals.  With receiving & delivery functions considered “logistical” functions within the health system, opportunities seemed inconsequential.  But of course we’ve seen that in many organizations, "materials management” or “purchasing" has become "supply chain," and that term is becoming associated with organizational strategy, not just the name of a department.  These supply chain organizations recognize their D2D processes are ripe with opportunity, savings and efficiencies.
With logistics and freight services accounting for more than 20% of an IDN’s total supply expense, including labor costs, and let’s consider these prime areas for potential system disruption for cost containment and increased internal customer satisfaction. Disruptions can occur across a range of possibilities:

  • In the case of a completely manual workflow, there’s an opportunity to automate the package receiving process, eliminate paper and manual data entry, and create an electronic delivery record (chain of custody)
    • Be sure to incorporate new KPIs (key performance indicators) to measure productivity
  • For organizations with some form of technology/automation, examine how well these solutions integrate with your system. Consider whether you’re consuming additional IT resources to support this technology? Ask your team where are the opportunities are to expand the footprint of automation?
    • Consider whether you’re limited to just a single stream of package tracking or does the solution support 100% package processing and/or site to site visibility?

The landscape of the healthcare industry has changed drastically over the last decade with the IDN model expanding to incorporate many outpatient centers, urgent care centers, offsite labs and physician offices. In addition, growing organizations are finding mergers and acquisition driving the need to support a landscape that’s ever-changing. It is critical that organizations keep pace with the technology to support those changing needs.