Is your department’s supply room or cabinet cluttered with a mix of overstocked, understocked and out-of-date materials? Throughout Kaiser Permanente, unit-based teams are taking stock of their supplies and finding they can save time and money by designing better systems for organizing and ordering supplies. Reducing supply waste is one of many ways that teams are helping KP become more affordable for our members and patients.Sort your supplies to determine which ones to keep, which should be disposed of, and which you need more information about before deciding.

1. Create an opportunity for everyone in the department to give input about how often different supplies get used, so you don’t eliminate something the department needs.
2. Organize the supplies by figuring out where each item belongs and then labeling supplies and shelves. Also set “par” levels, figuring out the quantity the department should always have on hand.
3. Remember safety when organizing the supplies. Make sure people won’t have to bend too low, reach too far or lift something that’s too heavy.
4. Establish a signal for when supplies need to be re-ordered. For example, the signal might beflipping the bin upside down, filling out a re-order card or alerting whoever oversees ordering supplies. And have a system for alerting people when an item is getting close to its expiration date.
6. Routinize the new system by having a plan to make sure supplies stay sorted, in order and clean. For example, create a checklist to make sure the new procedures are followed or assign someone to sign off at the end of the day that the supplies are ready for the next day’s work.
7. Check in regularly with other team members to make sure the new system is working and to tweak it if it needs adjustments.
8. Consider approaching departments similar to yours that may order the same supplies. You may be able to consolidate orders. For example, many departments in the same medical facility order sutures.
9. Calculate how much money you’ve saved. Compare what you were spending before on supplies to what you’re spending now.
10. Take before and after pictures to help you communicate the story of how your department reduced waste.

Budget-savvy shoppers know you can save money by buying in bulk—even, it turns out, when you’re buying pharmaceuticals. Just ask the team members of the Zion Outpatient Pharmacy in San Diego.

The unit-based team was able to save more than $1 million over five months by buying drugs in quantity and managing specialty medications better. And, adopting a practice that would make Goldilocks happy, the pharmacy now keeps just the right amount—no more, no less—of high-cost meds in stock. Managing costs helps keep expenses down for members, and the team’s improved communication means better service for patients, whose medications are there when they need them.

Not so long ago, the financial picture looked bleak for the 24-hour pharmacy, which serves discharged hospital patients and other members at the bustling Zion Medical Center. Inventory had swollen to more than $3 million. It was a signal the pharmacy had too much stock on hand and wasn’t turning it over frequently enough. 

“We realized that we needed to do something,” says Nathan Close, outpatient pharmacy supervisor and management tri-lead of the 45-member team, which is at Level 4 on the five-point UBT Path to Performance.

Honest assessment

Team members set a five-month goal to reduce their bloated inventory by $600,000, from $3.2 million to $2.6 million, starting in January 2016. 

Their first step was to review the pharmacy’s ordering and inventory practices. Team members quickly realized they were overstocking oral chemotherapy, Hepatitis C and antiviral medications. At $10,000 a bottle, rarely used pharmaceuticals suck up resources when they sit on shelves. Worse, if they aren’t used or returned to the manufacturer before they expire, they’re a costly mistake.

To get a better handle on prescription trends, team members reached out to ambulatory care pharmacists, who are part of a different team and who collaborate with physicians to treat members with cancer or chronic conditions. By partnering with the pharmacists, the team was able to plan ahead better.

“Once we know what patients are going to need, we make sure that we have that in stock,” says Wesley Frani, a pharmacy assistant and UFCW Local 135 member who is one of the team’s labor tri-leads. 

Key to the team’s success is another labor tri-lead, Jane Corby, an inventory control assistant and also a UFCW Local 135 member. She carefully monitors stock levels to ensure that when patients present their prescriptions, the right medications are on hand.

When the Ridgeline Behavioral Health team members in Colorado decided to tackle outside medical costs, even they were surprised at how their small touch on a huge issue could result in such significant savings.

Team members identified two ways they thought they could have an impact—including finding out which of their patients were being seen frequently in the Emergency Department—while helping their patients get appropriate care. 

“We know from evidence-based medicine that if patients are seeking care in the Emergency Department for mental health issues, it’s unlikely to provide a long-term improvement in symptoms,” explains Amy Martin, manager of Ridgeline Behavioral Health. 

Team members began the project by researching which outside hospitals Kaiser Permanente prefers to have members and patients use. Armed with the new information, they created a flier explaining the options and shared it with the rest of the staff, who then shared it with patients. This way, when patients did access care, they were more likely to go to a facility that KP has a contract with and thus, cut costs.

The results were remarkable. The team’s patients’ visits to emergency departments decreased by 8.25 percent, which in turn reduced ED costs by 26 percent. The total impact for 2016: $1 million in soft-dollar savings.