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Geisinger saves millions in medical dollars through better supply management

DANVILLE, PA A new approach to ordering supplies has helped Geisinger cut $30 million in unnecessary spending in the last three years, made it easier to recall medications in the event of pharmaceutical recalls and eliminated the duplication of many products.

Geisinger's Supply Chain Services was recently named materials management department of the year by Healthcare Purchasing News and it also received a Supply Chain Innovation Award from the Premier healthcare alliance.

"This is a great honor for our team," said Deborah Petretich Templeton RPh, MHA, Associate Vice President, Supply Chain Services. "By delivering supplies to our clinical teams in a timely, efficient manner, we're doing our part to help Geisinger provide outstanding healthcare."

Geisinger is experiencing a growth that's unprecedented in its history. The demand for services has increased significantly in recent years, the system has hired thousands of new employees and Geisinger has $200 million committed to construction projects.

With so much expansion, Templeton's team has been tasked with streamlining the supply ordering process and helping cut non-labor costs throughout the health system. Geisinger operates three hospitals and 40 community practice sites in central and northern Pennsylvania.

Since 2000, the team has launched several key initiatives, including:

  • Centralizing ordering of medical supplies and capital equipment with a new computer system;
  • Forming supply evaluation teams with key Geisinger departments such as cardiology, surgery, and radiology;
  • Closely monitoring equipment use and needs;
  • A new inventory control system for pharmacy.

Without these changes, Geisinger would have spent an extra $10 million per year during the last three years on materials and capital expenses relating to the system's growth, Templeton said.

The savings have come large and small.

By maximizing contracts, Geisinger recovered $2 million in manufacturers' rebates last year. The team also cut linen costs at Geisinger Wyoming Valley Medical Center by $.31 per patient per day after consulting nurses at the Wilkes-Barre hospital.

Beyond improving Geisinger's bottom line, there's also the potential to improve patient safety.

When supplies or medications are recalled, Geisinger notifies its departments about product location, and can quickly pull items. The system is also working with vendors and suppliers on consistent standards to better track products.

"It's not any one thing," Templeton said. "It's about looking at our entire operation and understanding what we really need."


Contact: Justin Walden
Geisinger Health System

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