We’ve Come a Long Way – Maybe
Every year at about this time I review AHRMM’s annual supply chain management survey and I’m always amazed at how far supply chain professionals have come in upping their salaries, benefits, and attaining perks, incentives and bonuses that were unheard of just a few years ago.
Yet, over the last few years I have been disappointed over the slow growth in the responsibilities and buying influence reported by this same survey. By way of example, the AHRMM survey reports that only 17.7% of central supply department’s report to MMs, 38% of materials management departments aren’t involved in contract management, and 62.4% of the respondents say they aren’t even responsible for value analysis at their healthcare facility. And a big surprise to me was that 88.6% say they aren’t in charge of their hospital’s laundry/linen services, which I consider a core function of material management.
Rather than bore you with more statistics, let me get to my point. When the concept of healthcare material management was first introduced in the 1970s the thesis was the MMs should be in charge of “anything that moves and isn’t alive”, as Charles E. Housley, healthcare supply chain guru, so aptly described it.
The thinking was that one person would be accountable, answerable and knowledgeable for the second largest expense for his or her healthcare organization. They would have ultimate control over all things related to a healthcare organization’s supply chain and then savings would naturally and easily cascade from this vertical supply chain organizational structure.
Somehow, based on the results of AHRMM’s latest annual survey, we have moved, as an industry, away from this basic material management tenet over the last 41 years, or maybe we never got this concept right in the first place.
As we enter the third year of the new healthcare economy, where every dollar saved counts for five dollars in revenues, I would strongly suggest that you read Chuck E. Housley’s classic and timeless book “Material Management” circa 1978 (it can be found by Googling his name on the World Wide Web). This is one way that you can truly understand this powerful, and apparently underutilized management technique, that if applied consistently and religiously will drive all unnecessary and unwanted cost out of a healthcare organization’s supply streams.
Filed Under: Lean Management • savingsblog • Supply Chain • Utilization Management
Interesting, when I started in Materials I made $2.95 an hour filling exchange carts and going to High School my first Director job came along in 1981 and I thought I was a millionaire when I jumped to a little over $12.00 an hour. When DRG;s kicked in the mid 80's our job got real important and all of a sudden between Materials and Medical Records we became the life line of the hospital.
The importance of our job is the hospital floating or sinking,
22 hospitals later and 11 states I still love my job….the money has been fair and I learn something just about everyday….
jw
John your comment brought back memories of my own career, where I started like you in the storeroom and then moved up to the position of purchasing assistant. From there I moved on to an Assistant Director of Purchasing for a community hospital and then Director of Purchasing for a children's Hospital. The title of materials manager wasn't even thought of at that time. I even spend time as a vice president of operations for a small medical/surgical distributor in Philadelphia, Pennsylvania. I then move back on the provider side as director of materials management for another community hospital and then a regional hospital system. I then took another detour as Director of supply chain consulting and ended up a VP of Support Services for a nursing home chain before starting my own consulting business 24 years ago. So like you I have been around the block a few times and still love the business. I learn a lot over my 38-year in healthcare business, but I still learning every day, week, month and year.