The cost management organization: the next step for materiel management

With Materiel Management's transition over the last decade from simple logistics to analysis and cost management, it has gained recognition as a key part of the management team responsible for supplies, equipment, standards, and associated processes to identify, purchase, store, distribute, issue, and dispose of supplies and equipment. The materiel manager's job consists of putting the right product in the right place at the right time and in the right quantity at the best total delivered cost. In this context, Materiel Management has made powerful impacts to lower costs associated with: Distribution--costs have been lowered by actively adopting advanced supply channel management techniques such as primary suppliers, JIT, stockless programs, case cart/custom kit/procedure based delivery systems, modified stockless programs as well as margin management through cost plus, flat fee, or margins paid per activity. Cost of goods--lowered through aggregated purchasing in the forms of regional and national purchasing alliances and local capitation or other gain/risk share programs. Internal process costs--lowered by out-sourcing and/or integrating supplier processes and personnel into operations via partnership approaches. We have also reduced transactional costs through EDI transaction sets and the emerging use of the inter and intranet/electronic commerce, procurement cards, and evaluated receipt settlement processes. De-layering--We have lowered the operating costs of Materiel Management overhead by re-design/re-engineering, resulting in reduced management and greater front line authority. Quality--We have learned to identify and respond to customer and supplier needs by using quality improvement tools and ongoing measurement and monitoring techniques. Through this we have identified the waste of non-beneficial products and services. We have adopted supplier certification measurers to ensure quality is built into processes and outcomes. With so much already accomplished, it should be easy to rest on these laurels and simply operate. However, we believe that this is just a beginning. A new generation of highly educated leaders are emerging and taking advantage of the contributions of pioneers who laid the ground work. These new leaders will have advanced management, statistics, and behavioral sciences skills. They will be analysts and organizational motivators. Their goal will be to improve financial and clinical performance measured by real time process and performance data. The new leaders will have information at their fingertips thanks to significant leaps forward in data collection, automated continuous replenishment processes, and software designed for better management of clinical and cost outcomes. This article documents significant Materiel management accomplishments and conceptualizes cost management processes. The cost management organization is the logical evolution in our efforts for better outcomes in healthcare Materiel management.     

Institutional strategic planning. The role of the materiel management department

The author discusses the components of the strategic planning process, how the process is managed, and how the materiel management department can incorporate its goals and objectives into the overall organizational mission.     

Pharmacy and materiel management: a profitable alliance

According to the author, materiel management can be a catalyst to a mutually beneficial relationship between their department and the pharmacy, particularly in wholesaler selection, buying group decisions and inventory control--if they use the right approach.     

Continuous quality improvement: implementation made easier for materiel management

The author describes the step-by-step implementation of continuous quality improvement, based on the Hospital Corporation of America's model for CQI, to correct a persistent problem in CS.     

1994 survey--healthcare materiel management and central service professions

Our 1994 professional survey shows an industry in flux. Institutions seem to be getting smaller, job tenure is shrinking for CS managers and materiel managers are convinced there will be fewer of them around. Salaries seem to be flattening for materiel managers, female materiel managers are being financially discriminated against and CS managers, though making more money, are losing benefits. Job dissatisfaction appears to be on the rise for both professions.     

HIV-positive health care workers pose legal, safety challenges for hospitals.

Hospitals are entering a complex new era. As they strive to work fairly with their HIV-positive workers, they are encountering a range of legal and operational challenges. Beginning on page 24, we look at the legal hurdles facing hospitals as they balance the right of HIV-positive workers to work, while ensuring co-worker and patient safety. On page 28, we look at the pioneering human resources policies being employed by one hospital in the infection control area. And on page 30, we look at the ongoing search for safer needle devices.     

Changing relations between hospitals and primary health care: new challenges for hospital management

Hospitals in the Netherlands are now operating in a rapidly changing environment. Most changes directly result from government's policy to achieve effective cost containment in health care. Some of them basically affect the existence and functioning of hospitals. These changing environmental conditions inspire hospitals to undertake innovative activities to protect or even strengthen their position. This will be illustrated below by a case in which a small acute hospital attempted to establish a close relationship with primary health care in order to protect its position. Our focus will be upon this innovative initiative and upon some management problems that must then be resolved.