Inventory Management Technology as the Hub of a Fully Integrated Specialty Practice Solution: Part One
For as long as physician practices have dispensed medications, they've also prioritized drug inventory management (IM).
The need for a medication IM solution fundamentally has to do with the challenges of storage: How can a large specialty clinic, for example, physically handle the high volume of pharmaceuticals it must have on hand to provide care for its patients?
And beyond storage, there are other issues as well, from the need for adequate refrigeration and temperature controls, to demands around safety and security and the logistics of distribution and resupply. The dangers of a misstep in any of these areas have always been serious and of major concern, but today poor handling is practically unthinkable — and a possible path to tremendous financial loss.
In recent years, financial considerations have led many practice managers to shift the way they think about inventory management. With payment reform and the rise of value-based care, where reimbursement is tied to efficiency and effectiveness, providers are increasingly turning to IM for far more than just the moving and dispensing of medication. Yes, it's important for physicians to have a way to effectively manage the drugs they give to patients. But their IM systems can be leveraged in other areas as well, and can even help practices add to their bottom lines.
So how can inventory management technology help practices thrive in the modern healthcare environment? Here's a brief overview of some of the biggest possibilities.
costs by automating manual processes
The top medication IM systems function as an extension of a practice's ordering platform. They employ technologies like radiofrequency identification (RFID) to automatically monitor inventory levels as products are added to or removed from cabinets. In the case of cloud-based IM systems—a popular solution for practices with multiple locations—they allow clinicians to easily place and manage orders by scanning product barcodes with a tablet. They help clinics move product between locations safely and efficiently, and they facilitate procuring replacements according to parameters defined by the practice. Staff who otherwise might spend hours tracking medications by hand—using spreadsheets to manually enter the relevant data—have more time to tackle other tasks when they have a technology that does that work for them. And finally, IM systems can reduce human error: When automation governs the management process, practices are less likely to make billing mistakes or unintentionally allow medications to sit unused.
operational visibility and optimize resource allocation
Best-in-class inventory management systems allow practices to easily follow every dose of medication from the point that it was stocked in a clinic's cabinet to the day full payment for the product was received. They provide real-time alerts that warn if a product is being dispensed too soon (based on the specific patient's insurance terms) so that payment losses can be stopped before they happen. They also provide automatic reporting functions that help with revenue cycle management (for example, allowing practices to track the different payers for any given treatment and compare the payments they've received with what they still owe vendors). And they include analytics tools offering insight around medication costs, inventory usage and turnover, and other relevant practice data.
Most of all, because IM technology provides a direct connection between practices and their pharmaceutical distributors, it helps providers maximize their cash flow. Orders are placed exactly when they're needed, eliminating the potential costs that come with overstocking — and the potential losses that come from expired medications. Because inventories are maintained at ideal levels, medications are never wasted. And through serialization, where medications are tied to their intended recipients with unique serial numbers, the right drugs are always available at the right time and are certain to go to the right patients.
better clinical and financial outcomes by integrating with other systems
For practices focused on value-based care, the ability to integrate an inventory management system with other technologies — and bring the procurement, clinical, finance and management teams all together on the same page — is critical. The leading IM systems are designed to send data to and receive data from a practice's electronic medical record (EMR) and practice management (PM) systems. Integration with the EMR allows clinics to track information about what was dispensed, which patient the medication went to, and which diagnosis was associated with that particular case. Integration with the PM permits practices to associate each dispense with the appropriate financial information, including whether the patient (or the payer) was billed for the medication and whether (and when) payment was received. It can also help individual practices fine-tune their pricing. Because the IM system tracks what a practice is paying for medications, it can compare those costs to eventual reimbursements to gain insight into operating margins — and determine when a price change makes sense. Ultimately, integration of IM technology with clinical and financial systems allows a practice to generate the reports it needs to know whether it's improving outcomes while controlling costs.
There was a time when inventory management was all about finding safe space for drug storage. But no longer. That's why IM systems are quickly becoming an important component of success for both practice management and patient care.
Inventory Management Technology as the Hub of a Fully Integrated Specialty Practice Solution: Part 3
An integrated inventory management system can play an important role in helping specialty practices address expectations and cater to a millennial patient demographic.
Inventory Management Technology as the Hub of a Fully Integrated Specialty Practice Solution: Part Two
Physician practices can leverage integrated inventory management systems to create a more user-friendly experience for patients that improves engagement, increases adherence and facilitates better outcomes.