Amanda Akers

6 Ways Preference Card Management Generates Hospital Cost Savings

When hospitals consider whether to invest in preference card management software, they naturally want assurance that it will provide real return on investment. Effective preference card management does wonders for cleaning up an operating room’s efficiency and making the lives of physicians and nurses easier, but its ROI goes even further than that. Preference cards are a source of valuable supply data for a hospital, and dirty preference card data can cost a hospital in numerous ways. Successful preference card management thus has a direct impact on hospital cost savings.

A big part of the problem with preference cards is that effective management demands more than manual effort can provide. Hospitals may have thousands of preference cards in their systems, and the task of cleaning and optimizing the cards is frequently neglected. Additionally, supply chain personnel typically have no access to preference card data, which means they are working with incomplete information when determining what supplies a hospital needs. By adopting preference card management software, hospitals can solve these problems and quickly begin to generate real savings in a number of ways.

6 Ways Preference Card Management Generates Hospital Cost Savings

  1. Reduce Pull Cost
    Pull cost refers to the cost of the items that are pulled from the CPD/SPD during a surgical procedure. When preference cards are not kept up to date, they are often missing supplies that are needed during a surgery. When this happens, the procedure must pause while the circulating nurse goes to pull the necessary supplies. Because they were not anticipated, these supplies may not be readily available, which is frustrating for the surgeon and potentially dangerous for the patient. It also lengthens the procedure, which is inefficient and costly for the hospital in numerous ways. When preference cards are up to date and accurate, hospitals will see this number trend down.

  2. Reduce Return Cost
    Return cost refers to the total cost of all the excess items that are returned unused to the CPD/SPD after a surgery. As with pull cost, hospitals with dirty preference cards will have high return cost, and hospitals with clean cards will see this number decrease dramatically. Returned excess supplies are a cost burden to hospitals for a few reasons. They must be returned to stock shelves, only to be picked and returned again until they lose their sterile integrity from overhandling, at which point they are discarded. High return cost also means the hospital is more than likely dealing with overstock, forcing the hospital to hold expensive excess inventory. By reducing return cost, therefore, the hospital will simultaneously reduce supply spend and overstock cost.

  3. Reduce Turnover Time
    Studies have shown that over a quarter of the items on the average surgery pick list are obsolete and no longer needed for the procedure. These unnecessary items create extra work for OR staff in both setting up for and cleaning up after a procedure. Unused items must be scanned, sometimes sterilized, and returned to the CPD/SPD before the OR can be made ready for the next procedure. As a result, on-time starts decrease and turnover times are lengthened, and the hospital’s largest cost center is unable to perform to its full capacity. When preference cards are optimized, hospitals will see turnover time reduced, allowing for better on-start times and more procedures overall. The result is a direct effect on the hospital’s bottom line.

  4. Increase Productivity
    Unclean preference cards also have a significant effect on the productivity of OR staff. Needlessly pulling and returning surgical supplies takes time, and the time that clinical staff must take round-tripping supplies to and from the CPD/SPD adds up quickly. The time of such highly skilled staff is valuable – too valuable to be wasted on unnecessary labor. Proper preference card management can help reduce this labor substantially.

    On the other hand, the time of surgeons and nurses is also wasted when items that are needed for a procedure are left off of the pick list. Circulating nurses have been known to spend up to a quarter of operating room time searching for required supplies during a procedure. Other facilities may have extra OR staff on call in case of such an event, but this is still a misuse of clinical labor. By eliminating these inefficiencies with proper preference card management, staff will face less frustration and can focus more of their time and energy toward patient care. More efficient and appropriate use of clinical labor, in turn, gives rise to opportunity for hospital cost savings.

  5. Reduce Supply Waste
    Perhaps the most obvious way that hospitals can use preference card optimization to generate cost savings is through the reduction of supply waste. If unneeded disposable supplies are opened during surgery, they must be discarded. If they are not opened, they are restocked until their sterile integrity is compromised from overhandling, and they are thrown away. Our own customers’ data has demonstrated that 15% of unused supplies get thrown away immediately. The supply waste that results from inaccurate preference cards is immense, totaling estimated millions per year for a single hospital. Preference card mismanagement is directly to blame for this waste; in fact, studies have earmarked preference cards as a “ticket to savings” for hospitals.

  6. Preference Card Standardization
    Preference card management enables easy standardization of preference cards, which in turn offers immense opportunity for hospital cost savings. Hospitals may stock numerous types of the same supplies due to differences in physician preferences, and these can vary substantially in cost. By standardizing preference cards, hospitals can reduce this variation and stock only the most cost-effective options. Thus, hospitals can ensure they are not overspending on supplies when less costly alternatives are available. Additionally, standardization allows hospitals the opportunity to consolidate vendors and arrange better deals, further ensuring that they are maximizing every dollar spent on surgical supplies. Case studies have demonstrated, in fact, that standardization can have a major impact on driving down supply spend.

When it comes to effective preference card management, the return on investment for hospitals is clear. With the aid of preference card management software, hospitals can make great strides toward optimizing their operating rooms and achieving major cost savings.

Case Study: Hospital Estimates 2.3M in Hard Savings

A major hospital in the northeast U.S. had numerous issues related to the lack of an effective process for preference card management. Change requests were made haphazardly, physicians were constantly frustrated, and turnover times and on-time starts were poor. As a result, the hospital scored under the 50th percentile in case volume when compared to similar facilities. The hospital also regularly over-ordered medical supplies, resulting in significant waste.

The hospital turned to PrefTech for a preference card management solution. Within the first year of use, the PrefTech platform demonstrated measurable results, decreasing return costs by nearly 70%. Turnover times were reduced by an average of 10 minutes, and physician satisfaction rose from 50% to 80%. In total, the hospital has thus far realized an estimated hard savings of $2.3 million.

PrefTech, the leading provider of Preference Card Management software, optimizes the management and consumption of perioperative supplies to improve the OR and hospital supply chain. To learn more about PrefTech, contact us today.