Hello, and welcome to our portion today on Inventory Management. My name is Allison Reisman. I have been an athletic trainer for 14 years and have been a DME coordinator for eight years. I work for Gnomes Healthcare, which is a large physician-owned multi-specialty group in Ohio. I started the DME program in 2016 and currently manage 42 locations. We purchase our products directly from the manufacturer, bill the patient and or their insurance company, and recoup the payment. The learning objectives for today's course is to identify common inventory management challenges, implement effective inventory management strategies, utilize technology for enhanced management, apply best practices for optimal outcomes, and anticipate future trends. Inventory management can be done in multiple different ways. In recent years, there are more and more offices that are moving to a dedicated online solution to help manage and run their DME program. An inventory management system is a cloud-based management platform that incorporates orders and the patient agreements. When a patient is dispensed a product, an agreement within the system will be created. This agreement is then signed by the patient and, if done correctly, can be used as a standard written order and proof of delivery. The inventory will be deducted from the stock count and you will know what is needed to be purchased in real time. Vendors can then be added to your platform and all orders can be placed within the same system. This allows a very transparent view of where all of your product is at any given point. Having a dedicated platform in place that all staff are trained on will increase efficiency, reduce costs, and increase patient satisfaction. There are multiple options to choose from when looking at cloud-based inventory management. The one that I use for my department is MotionMD, which is an Anovus product. Bragg has developed BraggVision and Oser has developed Empower. Each of these are solid options to go with and can be molded to fit your needs. Inventory management is incomplete without addressing stock control, which involves maintaining accurate inventory of products on hand, ensuring neither overstocking nor stockouts occur. Stockouts happen when a required product is unavailable, while overstocking occurs when excess inventory accumulates, leading to unnecessary overhead costs and inefficiencies. Deadstock refers to items that remain on the shelves for extended periods of time, typically three months or more without usage. It is crucial to determine a strategy for managing such products. If the items are still in use but overstocked, they can be retained and dispensed gradually. However, if products are no longer required, consider transferring them to other locations within your practice or even selling them at cost. Our system simplifies this process by having the DME budget fund all products until they are dispensed. At that time, once a doctor dispenses the product, then they also assume the cost. This structure facilitates seamless transfers between offices. In cases where a product is obsolete, donating deadstock can be a viable solution. Many local organizations, such as athletic trainers and schools or medical mission programs, are often grateful for DME donations. This can also provide your practice with a charitable write-off. Efficient stock control not only reduces operational costs, but also enhances workflow. With the right quantity and types of products available, employees, especially the newer can easily identify the correct items, minimizing time spent searching through excessive stock. Moreover, a well-organized inventory system ensures that products are readily accessible for their streamlining operations. Adopting a one-stop-shop mentality benefits patients by allowing them to obtain everything they need in one visit. This approach not only increases patient satisfaction, but also reinforces the importance of maintaining proper stock control to ensure a smooth, efficient process. The PAR level represents the minimum inventory threshold for each product to be maintained before reordering. When determining your PAR levels, consider the following factors. First one is lead time. How long does it take for products to arrive at your clinic? Are you working with a local supplier capable of next-day delivery, or is that product being shipped across the country with a four- to five-day lead time? Number two is usage rates. On average, how many units are consumed within one to two days, depending on shipping time? Additionally, consider seasonal variations in demand. For instance, during football season, there is often an increase in the need for shoulder stabilizers like the Soli and the shoulder pad attachments like the Spot. Similarly, as winter conditions approach, you may want to increase the stock of boots to ensure you're prepared for the season's demands. Third, critical products. Are there items that are urgently required when needed, such as the Versarom Hip for hip dislocations? For high priority items, it may be wise to maintain a buffer stock of two to three units to guarantee availability. PAR levels are dynamic and should be adjusted based on a thorough understanding of your office conceptions patterns. By regularly reviewing and adjusting your PAR levels, you can optimize your DME program's efficiency and ensure consistent product availability. Technology has revolutionized inventory management, making it significantly more efficient. Utilizing an inventory management system such as MotionMD, BregVision, or Empower eliminates the need for manual tracking and enables seamless program management. These systems automatically update inventory levels as products are used, streamlining the entire process. RFID tracking is a sophisticated system where each product is equipped with an RFID tag and inventory automatically adjusts when items are removed from a room or storage area. This technology helps prevent theft or misplacement, although it does come with a high initial investment. Alternatively, a barcode tracking system assigns a unique barcode to each product which is scanned during the addition or removal of inventory. This system is cost effective but requires manual scanning, unlike RFID's automatic tracking. For organizations with multiple locations, a cloud-based system is essential. It allows access to inventory data from anywhere at any time, enabling efficient management across various sites. For example, with 42 locations spanning northern Ohio, managing inventory without a cloud-based system would be highly challenging. A cloud system ensures that I can address inventory issues swiftly without requiring on-site visits. When selecting an inventory system, automation is key. A well-designed system will eliminate the need for constant stock reviews when placing orders and allow for seamless adjustments to PAR levels once stock levels fall between the established PAR. This system will prompt an automatic reorder, ensuring you maintain optimal inventory levels at all times. Shrink refers to inventory loss that cannot be accounted for, often resulting from theft, misplacement, or administrative errors. The goal is to keep shrinkage below 5% as it directly impacts the bottom line. To manage shrink effectively, regular inventory counts are essential. The frequency of these counts depends on the maturity of your DME program and historical trends. When starting a program, monthly inventory counts are recommended to identify and address issues promptly. As the program matures and shrink decreases, you may transition to bimonthly or quarterly counts. While quarterly counts are ideal for most programs, staffing and time constraints may make biannual counts necessary. However, this should only be considered once shrink issues are resolved. If you notice an increase in shrink, it is crucial to investigate its source. Possible causes include physicians or providers taking products without notifying support staff, potentially for personal use or distribution, staff errors in documentation where products are not properly deducted from inventory, incorrectly entered SKUs or product numbers. Shrink can stem from various factors, so it's vital to identify the root cause and implement targeted training to address the issue. If shrink persists, it may be necessary to implement security measures such as installing surveillance cameras or restricting access to inventory. This is crucial because shrink directly impacts profitability. Unaccounted for products are not built to patients, meaning the office absorbs the cost without generating any revenue, ultimately affecting financial performance. This slide highlights three clinics within my organization where we successfully enhanced operational efficiency through targeted interventions. In case study number one, this clinic is an orthopedic office, has eight providers in two locations. We initiated MotionMD, and after one month, we did a full inventory count and discovered $3,000 in missing inventory. After month two, we did another count, which showed $1,500 of missing inventory. And at month six, after providing training for support staff and physicians to address the issues, the third inventory count showed only $500 of missing inventory, which is a significant improvement. Throughout these stages, we ensured ongoing training to resolve discrepancies and improve accuracy. After six months of having them going on MotionMD, we did decide to hire an athletic trainer to work as the DMU manager, which has drastically helped this as well. The second case study, clinic number two is a podiatry clinic, has 18 providers in 16 different locations. Upon initiating MotionMD and conducting the first inventory count, we identified several issues, including redundant products from multiple vendors, outdated inventory, and discontinued items. We evaluated all products to determine their dispensability based on PDAC approval. Non-dispensable products were earmarked for donation. This process, along with dispensing usable products, resulted in nearly a $10,000 reduction in total inventory value within the first three months. We then streamlined our vendor list to three, focusing on quality products at competitive prices, further reducing overhead. By continuing to donate unused items and replenishing with fewer, higher quality products, we significantly improved inventory efficiency. Clinic number three, this also is a podiatry clinic, has three providers in one location. In the initial inventory review, we found multiple products with the same HICPIC code, leading to unnecessary redundancy. By consulting with the providers, we consolidated four boot options into two, which had a tall and a short option, and reduced ankle brace options from five to two, streamlining inventory management. In all three clinics, the strategic implementation of MotionMD, regular inventory assessments, and collaborative decision-making with providers led to significant improvements in inventory accuracy, reduced overhead costs, and enhanced overall efficiency. So there are some challenges in DME inventory management. Some common challenges include technology issues. So what happens if the Wi-Fi goes out or the system goes down? In the event of a Wi-Fi outage, it's essential to have a contingency plan. We mitigate this by keeping blank patient agreements pre-printed from our MotionMD system. These forms are used during downtime, and once Wi-Fi is restored, we manually enter the data into the system to ensure inventory accuracy is maintained. The next big challenge is staff turnover. So are your staff fully trained when starting a new position? Comprehensive training is critical to ensuring seamless operations post-implementation. To maintain consistency, we assign one or two dedicated individuals to train new staff, ensuring that everyone receives the same level of training and is proficient in the system's use. One common challenge that I hear all the time is we don't have time for that. This is one of the most significant hurdles when introducing new processes. However, it's important to demonstrate that although training may require an initial time investment, an efficient workflow will ultimately save time and improve overall productivity. It's important to highlight the impact of inefficiency. To illustrate the consequences of inefficiency, we assigned a dollar amount to lost inventory. This approach not only showed the direct cost of missing products, but also highlighted the revenue loss when products were unavailable for use. This data-driven perspective helps staff understand the broader financial impact and underscores the importance of adopting efficient processes. Implementing an inventory management system is crucial for several reasons. Firstly, the growth of large orthopedic groups with multiple satellite locations presents unique challenges. These locations often lack continuity, may share space with other providers, and typically don't have daily on-site staff from the main office. An effective inventory management system helps maintain consistency and oversight even in these decentralized environments. Secondly, when health systems merge, they often bring together a variety of different processes. Introducing an efficient, well-maintained inventory program from the outset provides a standardized foundation for all involved, ensuring a smoother integration and streamlined operations across all locations. Finally, with the ongoing staffing shortages affecting many industries, an efficient inventory management program becomes even more critical. A streamlined system minimizes the impact of staff reductions, helping maintain operational efficiency and ensuring that the clinic continues to run smoothly despite fewer personnel. In summary, inventory management is a crucial component of any DME program, regardless of size. There are various methods and tools available to effectively manage inventory from manual tracking to advanced digital solutions. However, efficient inventory management directly influences overhead costs and overall profitability, as it ensures optimal stock levels, reduces waste, and prevents lost revenue from stockouts or overstocking.

inventory management

Durable Medical Equipment

technology integration

stock control

operational consistency