For hospitals today, inventory management in clinical care areas is a matter of serious concern. The fact is, even many of the best hospitals do not have accurate, up-to-date data about the supplies they’re buying, using, and storing in operating and emergency rooms, pharmacies, cath labs and other facilities.

It’s a costly problem, to be sure. At any given time, the average 350-bed hospital has roughly $2 million in clinical supply inventory in its operating rooms alone. Yet approximately 30% of the items – or $450,000 in inventory – are not in the item master. These items were likely purchased without the benefit of approved contract discounts, which could have reduced the cost by 20% or more.

At a time when hospitals are doing everything possible to contain costs, that’s simply wasted money.

Enter Management Health Solutions.

Management Heath Solutions, Inc. (MHS) offers the health care industry fast, accurate, reliable, and cost effective clinical supply inventory management services. In fact, we’re a recognized leader in the category.

We can provide the necessary resources whether a hospital needs better inventory organization for a single department or an entire facility. Our management team has over 30 years of experience in the areas of health care supply chain management, materials management and information technology.

Prominent health care organizations across the country utilize our physical inventory services. We have extensive skill in running inventories in operating rooms, pharmacy, storerooms, central supply, cath labs, radiology, emergency rooms and capital equipment areas, among others.

MHS delivers user-friendly reports and computer files that can be used to generate diagnostic reports. All pricing of inventory is based on values provided by our customers (when available). Our comprehensive database allows us to access contract pricing to avoid valuing inventory at list prices. Our skilled staff performs the physical counting – and they’re even available to count on off-hours to minimize interference with normal operations. MHS completes internal audit checks on every job as it progresses through each stage of the process.

Best of all, MHS has the ability to analyze the information gathered during the process to provide cost saving and inventory reduction initiatives to improve a facility’s bottom line.

The benefits to using Management Health Solutions to perform inventory services include:

• Cost effective services
• Consistent counting methodology
• Identification of expired items
• Flexible schedules to eliminate distractions or service disruptions with no in-house overtime required
• Materials management and finance specific reports available
• Flexible pricing options
• Immediate ROI

INVENTORY METHODOLOGY
MHS’s first step prior to beginning a hospital’s inventory is to obtain an item file from our client. This item file should include all of the fields that will allow our counters to locate items in the file, and let our back office to accurately price the inventory. This data is then loaded into our inventory program that resides on the counters’ laptops.

Clients are notified in a proposal and on the day of the physical inventory walk-through that all consignment items or items that are not to be included in the count are to be properly "tagged."

The process at the actual physical inventory requires our counters to use a top to bottom, left to right counting methodology to ensure that all items are captured. When entering the count data, the inventory team will first search for an item by the catalog number. If the counters receive a direct match to the client file based on catalog number and MFG name, they will then enter the quantity and move on to the next product. If they do not match by MFG catalog number, they will attempt a search by description and MFG name. If a match is found, the counters will again enter the quantity and move on to the next item. If there is no match found against the client's item file, the item is entered into the program as an unmatched item.

After the physical inventory is complete, the back office will re-run unmatched items against the client item file to be sure that it is a true unmatched item. Once a true unmatched file is created, we present our clients with the option to price the unmatched item themselves. However, with proper authorization*, MHS will obtain pricing from client's vendors as stated in their proposal.

*MHS will verify pricing from vendors if a vendor authorization letter is provided from a client. If the client does not want MHS to verify pricing, then MHS will work with the client to update the pricing in the database. If this is the case, it will then be the client’s responsibility to contact the vendor."

PHYSICAL INVENTORIES
MHS provides access to an experienced program manager who coordinates all activities prior to and after the count. During the inventory count, a knowledgeable team leader will work with the client’s staff and supervise the count team. The team leader will conduct quality assurance reviews on all count teams throughout the entire inventory to uncover gaps within our client’s existing data. Discovering inconsistencies with field usage such as MFG catalog number and manufacturer name, UOM, and conversion factor enables MHS to turn reports around faster.

What makes us unique? We work with the client’s item file. In addition, we physically retrieve the data electronically by utilizing laptops and handhelds that are loaded with our proprietary software, as well as our client’s previously reviewed data. And of course, MHS’s inventory services meet the intent of the Sarbanes-Oxley Act of 2002.

As part of the service MHS will:

• Conduct a physical walk-through of the areas to be inventoried prior to conducting the inventory. This is done to ensure we have a full understanding of the areas to be counted.
• Count all open and partial containers and record the actual quantity in lowest unit of measure.
• MHS will also record the item description from package, the manufacturers catalog number from package, and location.
• Provide the inventory report back by location as agreed to during the physical walk-through.
• Check all counted items for expiration dates and remove expired items from the shelves, to the best of our ability.
• Provide a distinct listing of all expired items found in each location. We will also generate a separate report with their dollar value.
• Identify all items found in the counted area that do not match any record in the client’s item file and send them back for review and pricing

Due to our advanced technology, we can produce draft reports shortly after leaving the client site for a preliminary draft review. (NOTE: Our current turnaround time for reports is 30 days. Reports are delivered to the client through the password-protected MHS Analytical portal and are also available, upon request, in Microsoft Access or Excel).