The power of logistics and materials management in healthcare

There is no denying that the scientific and technological advances that the healthcare sector has experienced over the last 50 years have been unprecedented in human history.

As a result, average life expectancies have increased considerably across the globe and the average person is  expected to comfortably reach the age of 60 to 80 years old. There is no doubt that we are living longer.

However, this begs the question- are we also healthier? All the evidence seems to suggest that the answer to this query is a simple and rotund ‘No’. A brief examination of the recent history of human disease can reveal that there has been an epidemiological transition. A shift in disease patterns. Or, in other words, the things that make us sick today are different from what used to several decades ago. We seem to have transitioned from a prevalence of infectious diseases to an overwhelming prevalence of chronic degenerative diseases.

Medical worker in the surgical equipment supply room within the Sterile Processing Department
A surgical equipment supply room within the Sterile Processing Department. Surgical supplies are one of the most critical material groups in healthcare.
Source: United States Air Force.
Author: Staff Sgt. Jerilyn Quintanilla.

We are living longer but are generally not getting healthier. The onset of chronic disease has also been accompanied by a shift in the way modern medicine is practiced and administered.

Jose Sorribes, Waste Management Consultant at Buro Happold

The prevalent approach seems to focus on life-long treatments aimed at palliating several symptoms or pathologies yet failing to hit the root-cause of the problem. This is contributing to the increased economic stress on healthcare systems around the world. We must also consider that, in the UK, there has been an increase in the aged population in comparison to the working, ‘tax paying’ segment of the population (that is, for every retired person, there is less tax paying persons supporting their economic needs). This is a perfect storm for our healthcare systems.

The direct consequence of these social and economic factors is that healthcare institutions across the world are having to adjust to tight budgets. Reducing expenditure whilst maintaining the maximum standards of patient care has become the main crusade of hospital administrators. Historically, hospital managers used to concentrate their cost-reducing efforts on the main expense of the hospital, which is clinical staff salaries. However, there is only so much that can be done here without compromising the quality of patient care. Hospital managers know that there is a direct relationship between patient care standards and revenue for the institutions.

A flow diagram depicting the different ‘clean’ and ‘dirty’ material movements and processes within a typical Hospital. Buro Happold.
A flow diagram depicting the different ‘clean’ and ‘dirty’ material movements and processes within a typical Hospital.
Image: Buro Happold

In addition to this, many countries are facing serious nursing staff shortages, which further limits the ability of hospitals to keep shrinking the clinical staff expenditure pot. Consequentially, hospital managers have been turning their attention to the second biggest expense of a healthcare institution: materials management.

Materials management not only affects the costs of running an institution, but also the quality and delivery of patient care.

Jose Sorribes

For instance, the Surgery Department – which is the highest revenue-generating department of a hospital – cannot deliver any service if the right supplies are not available in the right place, at the right times and at the right quantities. Not surprisingly, the Surgery Department also represents the highest material management expenditure of any hospital (c. 60% of total supply costs).

The impact of not having the right supplies at the beginning of a surgical procedure go beyond cost: delayed or aborted procedures can lead to patient dissatisfaction, health complications and even loss of life. A suboptimal logistics strategy can hinder patient care services in many other ways (some of which may not be apparent at first sight). For example, nurses and other clinical staff are consistently reported to spend between 30% and 40 % of their time on logistical tasks: placing orders, looking for the right supplies, replenishing storage rooms etc. This is time they dedicate away from the task for which they were trained: taking care of patients.

A robust materials management system is essential to ensure minimum standards of patient care, satisfaction, and more importantly, safety.

Jose Sorribes

After all, the main purpose of any hospital is to treat people in the best possible way whilst keeping them safe at all times.

The power of logistics extends beyond this. An optimal materials management strategy can maximise patient experience, safety, comfort and the overall quality of healthcare services provided. Increased revenues and cost reductions are the collateral benefits that inevitably come with this. However, achieving an optimal logistics strategy requires an equally robust hospital design that facilitates its integration. In this context, strategic planning of logistics systems needs align with design efforts to ensure that all these benefits are realised.

Healthcare designers and developers cannot afford to overlook these facts any longer. They must give materials management the relevance it deserves. The power of logistics and materials management can no longer be underestimated.

Automated Guided Vehicles (AGVs) being used for the internal distribution of clean and dirty materials in a hospital.
Image: Buro Happold

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