A guide to reducing operating costs

Care Homes: Waste Management & Medical Supplies

find extra profit

Introduction

At Expense Reduction Analysts we are frequently asked to review the waste and medical supplies costs associated with Nursing and Care Homes.

In many instances we find the staff and management are under pressure to deliver the best possible service to the people for whom they care, whilst operating under increasing levels of scrutiny and legislation.

Waste and Medical supplies are therefore often expense areas which can go without ever being reviewed but from our experience offer excellent savings potential.

We have therefore put together our top 10 tips for each area to help you drive down costs and improve your bottom line profit.

Savings Made: Care Home Group (13 Homes) General Waste: 35% Clinical Waste: 38%

Waste

Finding those savings, implementing the solution, managing the overhead and measuring both the service and invoicing of the supplier are areas Expense Reduction Analysts excel in and which are reported back to you in quarterly audit reports.

This is done with minimum input from yourselves, allowing you to focus on your core activity of caring for people and not worrying if you are unknowingly overpaying for services which are a necessary aspect of the service you provide.

To help you gain a firmer hand on these areas we include our list of top 10 tips that may assist you in driving down costs and improving your bottom line profit

1. Waste CostsDid you know it costs nearly three times as much to dispose of Infectious waste as opposed to Offensive waste? Infectious waste must be incinerated and therefore costs more to dispose of whereas Offensive waste goes to deep landfill.

2. Mixing WasteYou should not mix Infectious waste with Offensive waste. If a supplier notices a small amount of Infectious waste in an offensive waste container, all of the waste will be treated as being infectious and disposed of accordingly, at three times the cost!

3. Counting WasteIf you pay for your waste on a per bag basis, ensure a member of your staff assists with counting the bags or at least signs off to certify the quantity of bags collected and check that this is in line with expectation.

Waste (Continued)

4. Review ContainersBy reviewing the size of your waste containers, and the frequency of collections, savings can be made.

5. Study the ContractMost waste suppliers operate a rolling 12-month contract whereby, unless notice is served 3 months prior to the annual contract anniversary date, you will be locked in for another 12 months – negotiate your contract terms!

6. Consignment NotesHazardous waste requires a consignment note usually charged at £10 per collection / visit. By careful planning of when your hazardous waste collections take place, multiple hazardous waste streams can be listed on the same consignment note, thus reducing administration costs.

7. RecycleIntroducing a recycling culture amongst your staff not only helps the environment but it can also significantly reduce costs.

8. Maximise SavingsMost nursing home waste costs are attributable in the following ratios; 2/3 clinical waste and 1/3 general waste. However, there is generally greater savings potential with general waste by the introduction of recycling but this does need careful planning and implementation and workforce support is crucial.

9. Landfill TaxThe annual landfill tax is a tax imposed by the government to encourage companies to recycle more. The current rate is £40 per tonne for rubbish going to landfill. This will continue to increase year on year by £8 – so the more you recycle the less you pay to have your rubbish removed.

10. Waste InvoicesContinually check your waste invoices for incorrect billing. You would be surprised how many errors or overcharges go unnoticed.

Savings Made: London Residential Healthcare (14 Homes) General Waste: 37% Clinical Waste: 44%

Medical Supplies

There are a number of issues that should be considered when reviewing costs associated with medical supplies. Of paramount importance is product knowledge in order to ensure like for like quality is achieved that will maintain standards of care and retain patient dignity.

By being able to work with a consultant who is a registered nurse with an NHS procurement background, not only is product knowledge assured, but all work is carried out according to the Nursing and Midwifery Council Code of Professional Conduct, ensuring that the legal ‘duty of care’ is enshrined in all recommendations made.

In addition to this we can identify areas where innovative products may improve your bottom line, review your compliance with regard to risk management and clinical governance agendas, and report savings realised on a home-by-home basis so that you know exactly where to concentrate your efforts.

We have listed a further top 10 tips to help you get a head start on making savings.

1. CultureInstil a cost management culture within staff – celebrate and reward successes through internal communications such as staff newsletters

2. Cost ControlEstablish your costs - you may believe your costs are under control, but your perceived ‘well kept ship’ may not be as leak-proof as you think. Forensically examine and benchmark your costs. It is our experience that this is often where the barrier to making cost improve-ments lies because it demands significant resource.

3. Supplier ControlReduce the number of suppliers you use wherever possible – this will reduce admin overhead on invoice processing and will also enable you to achieve commitment discounts on products in some cases.

Savings Made: Care Home Group (14 Homes) - Medical Consumables, Furniture & Equipment: 25% - Janitorials & Hygiene Products: 29%

Medical Supplies (Continued)

4. InnovateUnderstand and embrace the potential of innovation in making savings - it’s important to embrace the adoption of new technology where appropriate, as innovative products can result in real long-term savings, for example by lowering infection rates, cutting pharmaceutical bills or reducing the need for product usage.

5. Monitor ComplianceUnderstand that savings are not realised at the point of the buying decision but only when the purchase is made – once you’ve decided what changes are necessary, you will need to monitor compliance and address any problems before slippage becomes too much of a problem.

6. Create a programmeCreate a long-term cost-management programme - potential savings are great, but they don’t mean anything unless they are realised. After implementing a culture of cost consciousness, appoint cost champions to drive the programme forward.

7. Know the Marketplace By enhancing your knowledge of the supplier marketplace you will increase your confidence of using one supplier for a number of items and can often gain from a ‘basket’ cost rate.

8. Be ProactiveTake a proactive approach to the management of clinical risk as mistakes can be costly to put right– review your clinical guidelines and procedures to ensure that they comply with the latest HSE & NICE guidelines.

9. Realise Added ValueMany suppliers will provide additional services free of charge in addition to their usual after sales services when an organisation consolidates purchasing with them.

10. Product ChoiceConsider using a standardisation and rationalisation approach to product choice – this will not only enhance savings opportunities as outlined above but will allow you to achieve uniformity across the group in terms of standards of care, risk management and staffing.

Savings Made: Maria Mallaband Care Group (30 Homes) - Medical Consumables, Furniture & Equipment: 25%

Expense Reduction Analysts are the Global Leader in cost, purchase and supply management, focusing on reducing non-core operating costs for private, not-for-profit and public sector organisations.

Handling an annual supplier spend ofmillions of pounds on behalf of clientsin all sectors, the consultants at ExpenseReduction Analysts use their significantpurchasing influence to achieve optimum value from suppliers, often successfully retaining incumbents and using expert analysis and market intelligence to combat ‘contract fatigue’.

Expense Reduction Analysts has 170 consultants across the UK, as well as having global influence in over 35 countries specialising in more than 100non-core business expenditure categories.

For information on medical supplies contact Debjani Duncan RGN, BSc(Hons) Nursing, MBA at d.duncan@erauk.net or call; 07974 017549

For information on waste contact Glenn Cotter CIWM at g.cotter@erauk.net or call; 07793074596

or visit us at www.expense-reduction.co.uk

“Utilising the expertise of Expense Reduction Analysts was one of the easiest decisions I have made for my business”