Tuesday November 10, 2015
Over the past Halloween weekend, I was asked by a neighbor what I did for work, so I rattled off my pre-packaged: “Our group has produced a tool that combines data analytics and clinical best practices to analyze supply utilization trends in specific categories within healthcare organizations in an effort to identify areas for savings.” He looked at me puzzled, so I searched for a real-life example of my job, but I found it difficult to produce a metaphor to better explain what I do each day. Fortunately for me, we were interrupted by a storm of six year olds running through the group excited because the Chinese food had just arrived. Phew!
I considered the question again the next morning as I was pouring dried raspberries into a bowl for my two-year old daughter to have with her yogurt for breakfast. As I did this, I thought about how we had arrived at the fact that she loves dried raspberries. It started when my mother-in-law introduced us to Nature’s Path Flax Plus Red Berry Crunch Cereal a few months back. “Mimi’s Cereal”, as it was named by our two children, was soon in high demand by all members of our family, and I found myself at the grocery store buying multiple boxes per week. At $5.29 a box, the organic and admittedly very yummy cereal is not inexpensive—especially at two plus boxes per week. After a few months of buying the cereal, I noticed an interesting trend; every day we were tossing a pile of uneaten wheat flakes into the trash because our daughter was picking through her bowl and eating only the dried red berries. I realized that she had been doing this for weeks, but given the chaos each morning in our house to get out the door to school and work, I hadn’t really given it a second thought. I mentioned this to my wife and while the behavior fits the personality profile of our daughter, the cost was adding up. However, as families with two-year olds will recognize, it is not so easy to just stop buying a favorite cereal. What to do?
My wife found the solution at Trader Joe’s that weekend. Come to find out, they had bags of freeze-dried raspberries and strawberries for $3.99 each. Problem solved! We still have a happy daughter every morning because she is able to have a bowl full of berries (and now does not have to hunt and work to get them amongst wheat flakes). And the flake eating portion of our family is happy because the overall bowl ratio per box was back up to an acceptable level. Additionally, I am happy because overall cereal consumption is down, and I only need to buy one or maybe two boxes on occasion, every week at the store. More importantly for work though, I now have an everyday example to use to explain how utilization works. Excellent!
Next time I’m asked what I do, I can use the cereal example to explain utilization—we were buying the wrong product and overspending to meet the needs of all the members of our family. The correction in our purchases allowed us to reduce our overall breakfast costs by increasing the number of bowls of cereal we could get from a box because the total number of bowls poured per day was reduced. We are now buying fewer boxes of cereal per week and since the bags of dried fruit last for approximately two weeks, they are much less expensive than the cereal. These same exact principles apply to healthcare. We pick the dried berries out of our healthcare products all the time; think of how many kit components we toss in the trash, unwanted and unused. Hospitals can reduce their total costs by looking at products that add no value (wheat flakes) and ultimately decrease waste. You can buy a lot of dried berries with that type of savings!
Read Week 2: Better Coffee – No Sacrifices.
Join us on our 10 week journey by following us on LinkedIn.