2010 was a terrible year for hospitals, in terms of their inventory management. Across the country, their stock of more than 200 types of medicine fell to dangerously low levels. Just about every hospital or healthcare organization had at least one drug shortage, and 82 percent delayed treatments for patients. Why? Because they didn’t have the medicine they needed, according to an American Hospital Association survey.1
Of course, 2010 was a long time ago. Not that it’s not important. But the fact is that we’ve recently been through an experience that has put previous emergencies to shame. You might even say it’s unprecedented. That’s right. We’re talking about COVID-19.
The Covid pandemic certainly impacted hospitals and entire nations. If nothing else, it showed the importance of inventory management in hospitals. Not just to hospitals, but to every type of business. Without effective inventory management, medical supplies can’t make it to their destinations. So it’s definitely an important topic to address. It’s just interesting that most of the points that were so critical a decade ago are still exactly as pertinent to today’s crisis.
What’s Behind the Drug Shortage
A simple thing like having enough medicine in stock could mean life or death for patients. But the problem is that drug prices are increasing. And hospitals are struggling to keep costs down while also making sure patients get the treatment they need.
Why are drug prices increasing? There are several reasons. Such as rising inflation, quality control issues, manufacturing delays, and discontinued brands. The price of almost everything is steadily increasing. Thus, it’s no surprise medicine continues to get more expensive. It’s an unfortunate coincidence that drug manufacturers are struggling to keep up with demand as well as maintain quality and inventory control. At the same time. Many are even discontinuing certain drugs in favor of more expensive options.
Another problem is that many hospitals don’t have good order management systems in place. Let’s see what the American Hospital Association survey has to say on this. Keep in mind that this information is all from 2010. And yet it still rings true as if it was written yesterday.
“Three of 4 hospitals report that they rarely or never receive advance notice of drug shortages and are often not informed of the cause or the expected duration of the shortage.” That is not good. Why don’t many hospital directors know how much medicine they have in stock? Also, why don’t they know when they need to order more? In truth, it’s a lack of communication and recordkeeping.
Solving the Drug Shortage
The good news is that hospitals recognize that they have a major problem. And they’re trying to fix it. “Hospitals are taking many actions to reduce the impact of drug shortages on patients, including increasing inventory level and devoting resources to train clinical staff to address shortages.”
As a result of these constructive actions, they have seen improvements over the years. However, there’s always room for improvement. Especially when hospital inventory management tools are so easily accessible.
Unfortunately, just increasing inventory level won’t get rid of the problem of higher drug prices. If hospitals order too many drugs, they could face new problems. For example, product spoilage and lack of funds to pay for other essential medical equipment and personnel. Indeed, hospitals need to make sure they’re getting the right amount of medicine to prevent serious problems. But they should take care not to go overboard.
The right inventory solution for hospitals needs to address higher costs and inventory balance. In addition, it should be fairly simple to use. It can do this by helping hospitals choose the best vendors, for supply chain management, and inventory tracking in multiple locations. Not exactly the easiest job ever. Though there are proper inventory management solutions out there that are up to the task.
Give Inventory Management Software a Try
Even though 2010 was the worst year on record for medicine shortages, and 2011 didn’t fared much better, hospitals can still turn things around. They just need the right tools.We recommend signing up for an online demo of Fishbowl’s inventory management software. Fishbowl is the No. 1 manufacturing and warehouse management solution for QuickBooks. And it’s a great fit for any healthcare provider. Click the link above to see for yourself how much it can benefit your operations.
Robert Lockard is a copywriter with Fishbowl. He writes for several blogs about inventory management, manufacturing, QuickBooks, and small business. Fishbowl is the #1-requested manufacturing and warehouse management software for QuickBooks users. Robert enjoys running, reading, writing, spending time with his wife and children, and watching movies.