Aligning Value and Volume: Mitigating Vendor Overservicing in Regulated Medical Waste Management
Is an operational cost drain hiding in plain sight? A strategic examination of regulated medical waste management reveals surprising answers.
Straddling superior patient care and budget optimization is a delicate tightrope that healthcare providers walk daily. In this pursuit, one area often overlooked yet rife with untapped savings potential is Regulated Medical Waste (RMW) management. This is especially true when considering the often overlooked practice of vendor overservicing.
Vendor overservicing, a phenomenon where services provided outpace actual requirements, can lead to inflated costs. This overservicing can take many forms in RMW management, including excessive waste pickups, surplus supply of RMW containers, or services beyond the scope of actual needs. These seemingly benign practices can significantly inflate operational costs.
This examination uncovers the pervasive issue of vendor overservicing in RMW management, outlines mitigation strategies, and discusses essential internal adjustments that could lead to substantial cost savings without compromising on the quality of RMW management.
A Real-World Case: Unpacking Vendor Overservicing
A midsized not-for-profit healthcare organization in the Midwest, grappling with unexpected operational cost escalations, identified RMW management as a significant contributor. To investigate, they enlisted the assistance of Archstone, an audit and advisory firm specializing in operational cost optimization.
The consultation began with a comprehensive audit of the organization’s waste generation patterns to understand their actual RMW needs, which varied based on factors like patient volume, types of procedures, and seasonal variations.
The investigation’s results prompted the frequency of waste pickups and the supply of RMW containers to be adjusted to align with the actual waste generation rates. In tandem, staff training on proper waste segregation practices was ramped up in order to curb waste misclassification and drive down RMW volume. In addition, active bin monitoring was put in place in order to capture the true service demand required for the acute care facilitiy, along with the lower volumes at many of the organization’s offsite locations.
To maintain these efficiencies, the organization implemented routine internal waste capacity reviews, ensuring that RMW management services stayed aligned with actual needs, thus preventing cost escalations due to vendor overservicing.
Simultaneously, the organization initiated a dialogue with the RMW vendor. These conversations focused on sharing internal audit findings and review outcomes to better align vendor services with the organization’s needs. The goal was not to apportion blame, but to collaborate on improving service delivery.
The outcome was a leaner RMW management process, with a 30% annual reduction in RMW management costs.
Strategies to Mitigate Vendor Overservicing
The Midwest organization’s journey underscores how strategic interventions in RMW management can lead to significant cost savings. Key insights from their experience include:
- Aligning Waste Generation and Vendor Services: Understanding the quantity and type of waste generated is a foundational step. It helps in aligning vendor services with actual needs and ensuring that the vendor contract is reflective of the real waste capacity.
- Load Monitoring: Regular monitoring of waste loads can prevent vendors from making needless pickups, or picking up “air” from near empty containers.
- Bin Right-Sizing: A key element of overservicing results from improper sized bins for collecting RMW. Right-sizing the collection methods allows for fewer pickups, and as a result less fees.
- On-Demand Pickups: Establishing a system for on-demand pickups can be a game-changer. Rather than sticking to a rigid schedule, pickups can be arranged based on when the RMW containers are nearing capacity. This requires good communication with the vendor and a clear agreement in the contract.
- Contractual Clarity: Ensuring that the contract with the vendor accurately reflects the organization’s needs is paramount. This includes clauses about waste pickup frequency, RMW container supply, and terms of service modifications in response to internal audit findings. A well-negotiated contract can protect the healthcare provider from vendor overservicing.
- Continuous Training: Regular training sessions on proper waste segregation can minimize the misclassification of regular waste as RMW. This step alone can significantly reduce waste volumes and associated costs.
- Regular Internal Reviews: Routine reviews of internal waste capacity can keep received services aligned with actual requirements. These reviews serve as checkpoints to identify and correct any discrepancies, thus keeping vendor overservicing in check.
The RMW management approach is not static and should evolve to adapt to changing needs and opportunities for cost optimization. By identifying and mitigating vendor overservicing, healthcare organizations can convert a traditionally costly operation into a wellspring for substantial cost savings.
In conclusion, the need to judiciously manage operational costs in healthcare can never be overstated. Every dollar saved can be funneled back into improving patient care, driving healthcare providers closer to a reality where exceptional patient care is sustainable and affordable. In this context, taming vendor overservicing in RMW management can be a giant stride in the right direction.