Maynard Gets Results: Maynard Helps Cardinal Health Increase Sales by Quantifying Labor Savings

Hospitals are faced with labor-intensive Operating Room (OR) time constraints on a daily basis. Each procedure performed by a hospital for patients requires a pick list of 50-200 individual supplies, such as swabs, gloves, scalpels and other instrumentation. In many cases the clinical staff is responsible for selecting all of the items, crosschecking them to the pick list and transporting the supplies to the OR Suite. Imagine the time it takes for a single person to identify, select and transport supplies to the OR, not to mention the possibility for error. This takes the clinical staff’s attention away from where it should be – on the patient.

Cardinal Health, Inc. is a leading provider of products and services supporting the health-care industry. Cardinal Health companies develop, manufacture, package and market products for patient care; develop drug-delivery technologies; distribute pharmaceuticals, medical-surgical and laboratory supplies; and offer consulting and other services that improve quality and efficiency in health care. The company, which is headquartered in Dublin, Ohio, employs more than 49,000 people on five continents and produces annual revenues of more than $40 billion.

Since 1993, Cardinal Health’s Medical Products and Services Division has manufactured modules that make picking supplies for a procedure faster, easier and more accurate, allowing hospitals to improve patient care while reducing labor costs and supply waste. Each Procedure Based Delivery System® (PBDS) module provides a collection of supplies that are essential to specific surgical procedures, with a majority of supplies for one procedure contained in a pre-assembled case.

Validating Labor Savings with Maynard

From the beginning, hospitals believed that the PBDS module would reduce the time required for case pick, set up and clean up, resulting in faster turnover of the OR Suites and allowing the OR to schedule more surgical procedures, and increase service and revenues.

“Using MOST® allowed us to more quickly assess potential hospital savings with much greater accuracy.”

However, in the late 1990s the healthcare industry was bombarded with several issues, causing hospitals to re-evaluate their budgets and spending habits. Cardinal Health knew that it was necessary to establish quantifiable evidence to demonstrate how the PBDS program would positively influence a hospital’s bottom line. The key was to quantify and validate the labor savings.

In order to do this, it was necessary to analyze the price of supply items sold in bulk and the cost of labor involved in preparing for a procedure following the traditional pick list methods and compare that to necessary PBDS labor. The resulting savings would be used to help sell PBDS to hospitals. Cardinal Health engaged H. B. Maynard and Company, Inc. to overcome the difficulty in proving labor cost savings.

A MOST Impressive Next Step

The Maynard Operation Sequence Technique (MOST®) allowed Cardinal Health to identify the paid labor hours that the PBDS program would eliminate from a hospital’s operating budget. MOST is a revolutionary work measurement tool designed to simplify and speed up the process of setting engineered time standards. MOST focuses on the amount of time it takes to complete specified activities, with standard method description formats created for each sequence model.

Once the data was compiled, Cardinal Health and Maynard developed a MOST database of the specific tasks that were affected by the PBDS program. This allowed Logistics Managers to accurately assess the paid labor impact the PBDS program had on the surgical supply chain, and gave them the ability to quantify this impact into a solid cost savings.

The data demonstrated that PBDS modules reduced the surgical case pick from 18-25 minutes to less than five minutes per procedure. Fewer picks resulted in less labor and fewer errors, not to mention less user administration, ordering and tracking.

In addition, Logistics Managers were also able to determine a cost savings in the time necessary to prepare the back table in the surgical suite. What once took a Circulating Nurse 12-15 minutes to accomplish now dropped to less than five minutes for each procedure using a PBDS module. Because many items in a PBDS module are sterilized and enclosed in one pouch, much less time was needed to open and arrange the items.

“Maynard provided the analysis for selling the system. Their data was invaluable in proving the labor savings created by PBDS,” said Chris Rowe, Director of Marketing for Cardinal Health, Perioperative Products and Services. “Using MOST allowed us to more quickly assess potential hospital savings with much greater accuracy. Customers understood the underlying science of the results, and had greater confidence in the product’s pro- jected savings.”

The Future of MOST in the Health Industry

Today, more than 400 hospitals are benefiting from the PBDS program. The labor savings alone are vital for hospitals facing a variety of economic and labor challenges, and combining this program with MOST will provide staff with more time to care for patients or assist in the OR. “Given the shortage of nurses nationwide, hospitals are looking for every possible way to save time on the administrative tasks required by the clinical staff,” Rowe said.

The PBDS program and MOST are not off-the-shelf solutions. They require effort and collaboration between the hospital staff, Cardinal Health consultants, and the Maynard Team. Hospitals interested in implementing both of these systems must be prepared to make a commitment, devote resources, and be willing to change their behavior in order to achieve success.

Maynard and Cardinal Health teamed up to prove the real value of the PBDS program as well as the application of the MOST Work Measurement System. PBDS improved the efficiency and accuracy of the case pick process, reduced supply inventory and waste, and led to lower labor costs for the hospital. These benefits help hospitals to reach their ultimate goal of providing the best patient care possible, while managing their business well.

“A proven way to supply chain improvement is through these kinds of programs,” Rowe said. Because of applying MOST, Cardinal Health was able to partner with its customers, assisting them in reducing labor costs, enhancing efficiency in the OR and ultimately improving patient care.