Central Inventory Management Case Study: CRMS (MKYS)

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Web based, standardized IT system enabled the hospitals of Turkey transferring medical supplies which are unneeded and exceeded. Policy implementations in hospital level resulted significant savings in national level. This study presents system, results and conclusions.

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  • I’ll share a case study from Turkey about a system improve
  • I’ll start with some general information from Turkey. Turkey is a country with 75 million population, over 300 thousand square miles area and 15000 dollars GDP per capita. Growth rate is over 9 percent for several years with stabile inflation and unemployment rates below 10 percent in recent years.
  • When we start to speak about health system in Turkey, we need to say something about Health Transformation Program which is started in 2003. It aimed to increase access and improve efficiency. HTP implementation triggered administrative and financial reforms in Turkey which includes our case study.
  • Improvements in Health Status with some well-known indicators. Life expectancy which is predicted as 75 year by 2025 in World Health Organization Report is already achieved by 2011. Another important indicators accompanied this indicator. Maternal Mortality declined by 75 percent and Infant Mortality reduced by 79 percent only in 9 years.
  • This success became the subject of many international evaluation reports prepared by World Health Organization, World Bank and OECD experts.
  • Health System reforms are evaluated as “good practices” in terms of equity and financial protection. Political commitment and result oriented approach of Turkey government is praised to be a lesson for other country efforts
  • The most important characteristic(and also a problem) of hospital system before Health Transformation Program Reforms was its dispersed and fragmented nature. In insurance side, there were four different agencies for different facets of insurers.
  • These four agencies provided service to their insurance holders from different type of health facilities. Self employed people and blue collar workers were using Social Insurance Agency hospitals while civil servants using Ministry of Health Hospitals. Military patients to Military hospitals and limited number of patients to Private hospitals.
  • Two unification were made by reform. One for insurance side and the other for hospital ownerships side. First unification against that dispersed and fragmented structure was for insurance system. All social security institutions gathered united under General Health Insurance in 2005
  • In provider side, Social Security Institution hospitals joined to Ministry of Health and single umbrella covered public hospitals except Universities.
  • After reforms All patient groups which are recently covered by single insurance body (General Health Insurance) could get the healthcare service from either MoH, University, Military and Private Hospitals
  • During the reforms Total expenditure of health as a percentage of GDP escalated. It was still under the OECD average, but far high from the beginning of reform. From 2.4 to 6.1
  • At that point, when we look the components of health expenditure, we will see Hospitals’ share with 40 percent.
  • Dispersed characteristic of hospital system changed by years and by 2011 MoH hospitals dominated the sector.
  • By year 2011, 64 percent of hospitals were in MoH ownership, while Universities has 19, Private hospital has 17 percent. Hospital sector and particularly public hospitals which has the greatest share of health expenditure became the primer subject of policies, implementations and saving efforts.
    Then we can say hospital has the biggest share in health expenditure and MoH hospitals has the biggest share in hospital sector. Savings in MoH hospitals matters.
    ----- Meeting Notes (2/23/14 11:51) -----
    Hospitals has the biggest share in health expenditure
    MoH hospitals has the biggest share in hospital sector
    Saving in MoH hospitlas matters
  • Increasing health expenditure focused MoH’s efforts on cost containment policies.
    Unification of public hospitals enabled interconnected IT systems.
    Improvements in Hospital IT systems needed.
    CRMS, SAS and HRMS were started in 2009.
  • This three IT systems are operated in interconnection for stocks, human resources and accounting in more than 800 hospitals and totally more than 1000 health facilities.
  • Reasons while generating CRMS were shifting to standardized digital recording, integrating inventory management systems of hospitals and by that means reaching a reliable and transparent system.
  • CRMS is an integrated web based system which gives MoH the ability of monitoring, controlling and policy making over more than 1000 health facility inventory systems.
  • With advanced functions of CRMS, hospitals and MoH can make price inquiries, macro analysis and they could plan for future usage.
    MoH could implement macro policies.
  • Two problems are determined and two solutions are enforced to solve them.
    First problem was high stock levels in hospital inventories. Controlling the stock levels is adopted as policy
    FIRST SECOND SOLUTIONS SEPARATE
  • Other problem was waste of the unused materials. We had needy hospitals use the unneeded materials and medicines of other hospitals
  • Hospitals obtains all of materials at the beginning of the fiscal year and takes over the stocking responsibility
    Hospitals confronts with huge amounts of stocks.
    That means increases in inventory costs (with large warehouses and expiration)
    Solution was determined as controlling intakes (not to accept whole material in a single time) and fixing stock levels in a certain level)
  • MoH regulation: “Maximum stock in hospitals limited to the need over three months”
    Hospitals which has excess stock made declaration by system
    Hospitals made inquiry before purchasing
    Hospitals could access each other’s “excess stock” information
    Transfer between hospitals started
  • Stock amounts escalated until the start of implementation.
    In first months of implementation a sharp decrease in stock levels could be monitored.
    Then a stabilization period started.
  • In yearly basis for medical supplies we can see decreases and stabilization for stock level while total purchases are increasing
  • Data for medicines demonstrates a parallel tendency. Decrease in stock level while total purchase increases.
    That means per capita decreases for either materials or medicines
  • Transfers made because if exceeded stocks is totally more than 190 million dollars in nearly 5 years
  • Hospitals had an unneeded stock problem.
    Ineffective estimation of material needs, Diverse supply requests from physicians(physicians who don’t want to use material requested), High physician circulation rates. Unforeseeable changes in material usage
    That was other source of waste and that unneeded stocks must be used before expiration.
    Solution was determined as having other hospitals use unneeded stock before it goes to waste
  • MoH wanted 1004 health facilities to share information about their supplies that are not needed
    Hospitals which has unneeded stock made declaration by system
    Hospitals made inquiry before purchasing
    Hospitals could access each other’s “excess stock” information
    Transfer between hospitals started
  • Nearly after 5 years amounts of unneeded materials were totally 186 million dollars.
  • Hospital which receives the demand for its materials calls back in 5 days
  • Stock price, amount and other details are recorded to system.
  • Unneeded and exceeding materials and medicines can be monitored by other hospitals and MoH. Here unneeded stocks are orange, exceeding stocks are red labeled.
  • Hospitals has to make inquiry for other hospitals’ unneeded and exceeding stocks before they purchase
  • Hospital inventories are integrated with standardized central system.
    System enabled planning, making analysis and implementing macro analysis.
    Unneeded and exceeding stock transfer policy is made possible by contributions of CRMS
  • Thanks for listening.
  • Central Inventory Management Case Study: CRMS (MKYS)

    1. 1. M.Said YILDIZ, Prof.Mahmud KHAN (Presented in Florida, February 23th 2014)
    2. 2. Content • • • • • • • Turkey and health status indicators Turkey Health System and reforms Increase in health expenditure CRMS (Centralized Resource Management System) Case Study : Two problems, solutions and effects Contribution of IT system to implementation Conclusion
    3. 3. Turkey at a glance Population 2013: 75,627,384 Population Growth Rate: 1.3% Area total: 302,535 sq mi  Density: 239.8/sq mi GDP(PPP) per capita: $15,001 HDI(2013): 0.722 (high) Growth Rate (2010): 9.5% Inflation Rate: 7.4% Unemployment Rate: (2012) 9.2%
    4. 4. The Health Transformation Program • Started (2003), • Health reforms by Ministry of Health (MoH) • Objectives: to increase access to healthcare services and to improve efficiency. • Triggered administrative and financial reforms.
    5. 5. Life expectancy at birth Predicted by WHO for Turkey by 2025 (WHO report of 1998) Average 75 Achieved by Turkey 2011 Female 76.8, Male 71.8. Maternal Mortality Rate a decline by 75% Infant Mortality Rate (per 100,000 live births) a decline by 79% 2003 61 47 2011 14.5 9.9 Per 100,000 live births
    6. 6. Some quotes on success • Health Transformation Program seems to represent “good practice” in the development and implementation of major health system reforms and preliminary indications are that it has been successful. (OECD report, 2010) • “Based on the overall information available from the latest national health accounts and Household Budget Surveys, it appears that the Turkish health system performs quite well in terms of equity and financial protection, both in absolute terms and relative to other countries.” (OECD Review of Health Systems Report) The lessons from Turkey are that with political commitment and a flexible, results oriented approach, Health Systems Strengthening interventions can be successfully implemented to have an important impact on the performance of the health sector. (World Bank Report, Sarbani Chakraborty Lessons from the Turkish Experience, Dec 2009, Volume 12)
    7. 7. • Turkey and health status indicators • Turkey Health System and reforms • • • • • Increase in health expenditure CRMS (Centralized Resource Management System) Case Study : Two problems, solutions and effects Contribution of IT system to implementation Conclusion
    8. 8. Before Reforms Dispersed and fragmented Social Security and Hospital Systems Bag-Kur (1971) Social Insurance Agency of Self- Self-employed employed - SISE SSK (1946) Social Security Association – SSA Blue Collar workers Emekli Sandigi (1950) Pension Fund for Civil Servants – PCS Civil Servants Yesil Kart (1992) Green-Card (uninsured people)
    9. 9. Before Reforms Dispersed and fragmented social security and hospital system SSA Hospitals SSA Hospitals SISE patient SSA patients PCS PCS patients patients Military patients Limited number of patient MoH Hospitals MoH Hospitals University Hospitals Military Hospitals Private Hospitals
    10. 10. Unification of dispersed and fragmented social security system All social security institutions united under SSI (2005), General Health Insurance could be created. Green Card as an instrument of Social Policy covered needy and uninsured people from catastrophic health expenditures. GC
    11. 11. Unification of Public Hospitals Ownership of all SSA’s hospitals were transferred to the MoH. Hence, with this final step unification process of the reform has been completed. (law: 5502)
    12. 12. After Reforms All patient groups that are covered by General Health Insurance could get service from either MoH, university or private hospitals Civil servants are allowed to benefit from private health institutions. (Protocol signed between MoH and the Ministry of Finance, (April 2003) A protocol signed that enables Members of SISE, PCS and GC to benefit from SSA hospitals, and members of SSA to benefit from MoH (public) hospitals. (July 2003) General Health Insurance could be implemented for all citizens by January 2012 MoH MoH Hospitals Hospitals All patient groups with General Health Insurance University Hospitals witit wh hcco o-pp - aa yym mee nnt t Military Hospitals Private Hospitals
    13. 13. • Turkey and health status indicators • Turkey Health System and reforms • Increase in health expenditure • • • • CRMS (Centralized Resource Management System) Case Study : Two problems, solutions and effects Contribution of IT system to implementation Conclusion
    14. 14. Total health expenditure (% of) GDP 6.1 7 6 5 4 3 2.4 2.4 2 1 0 1980 1985 1990 1995 2000 2005 2007 2008
    15. 15. Health Expenditure in Turkey Investments Investments %9 %9 Other Other %51 %51 Turkey Statistics Institute Bulletin, Number: 34, February 18, 2011, Hospitals Hospitals %40 %40
    16. 16. Ownership status by hospital beds 2011 Private % 17 2004 University % 19 MoH % 64
    17. 17. Number of beds (2011) Private Private %17 %17 University University % 19 % 19 MoH MoH %64 %64
    18. 18. • Turkey and health status indicators • Turkey Health System and reforms • Increase in health expenditure • CRMS (Centralized Resource Man. System) • Case Study : Two problems, solutions and effects • Contribution of IT system to implementation • Conclusion
    19. 19. Increased health expenditure cost containment policies Unification of public hospitals interconnected IT systems CRMS Improvements in Hospital IT Systems HRMS SAS
    20. 20. Interconnected IT systems (Stocks-Accounting-Human Resources) CRMS is a resource management system which operates in conjunction with 2 other IT systems: SAS - Uniform Accounting System HRMS -Human Resources Management System)
    21. 21. Reasons for initiating the CRMS •• To transfer hospital records from manual to To transfer hospital records from manual to digital digital •• To build a central inventory management system To build a central inventory management system •• To standardize data entry for all hospitals To standardize data entry for all hospitals To assure To assure more reliable -more reliable transparent transparent system system
    22. 22. CRMS Centralized Resource Management System • • • • • • • web based, Integrates hospital IT systems; centralized monitoring and control policy making in more than 1000 health facilities by more than 7000 users since 2009.
    23. 23. Advanced functions of CRMS system • Hospitals could make price inquiries before purchasing, could learn about purchasing prices of other hospitals and their providers • MoH and hospitals had opportunity of making macro analysis for hospital inventories, • MoH and hospitals could plan inventories more accurately. • MoH could implement macro policies more conveniently.
    24. 24. • • • • Turkey and health status indicators Turkey Health System and reforms Increase in health expenditure CRMS (Centralized Resource Management System) • Case Study : Two problems, solutions and effects • Contribution of IT system to implementation • Conclusion
    25. 25. INVENTORY PROBLEM-1 SOLUTIONS High stock levels in the hospital system in general 1. Controlling and managing stock levels 2. Transferring to other hospitals
    26. 26. INVENTORY PROBLEM-2 SOLUTION Waste of unused materials Transferring to other hospitals before they are wasted
    27. 27. Solution: Controlling Intakes and Stock level
    28. 28. Excess stock transfer process Hospitals which MoH regulation: MoH regulation: has excess stock “Maximum stock in “Maximum stock in made hospitals limited to the hospitals limited to the declaration by need over three months” need over three months” system Hospitals made inquiry before purchasing Hospitals could access each other’s “excess stock” information Transfer between hospitals started
    29. 29. Stock level reached maximum. Implementation started 1200 Initial results Stabilization of stock level 1000 800 600 million TL 400 First months. Sharp decrease in stock level 200 0 Feb-08 May-08 Aug-08 Nov-08 Feb-09 May-09
    30. 30. Amount of medical supplies (purchased vs stocked - million TL)
    31. 31. Amount of medicines (purchased vs stocked - million TL)
    32. 32. Result #1: Amount of materials transferred within system Transfers of materials which exceeded maximum stock limit 2009 44,024,213 US $ 2010 42,067,765 US $ 2011 29,516,233 US $ 2012 27,623,826 US $ 2013 (first 9 months) 48,750,505 US $ Total 191,982,542 US $
    33. 33. Solution: Using unneeded stock before it goes to waste
    34. 34. Unneeded stock transfer process MoH wanted health MoH wanted health facilities to share facilities to share information about their information about their supplies that are not supplies that are not needed needed Hospitals which has unneeded stock recorded information to system Other Hospitals made inquiry before purchasing Hospitals could access each other’s “exceeding stock” information Transfer between hospitals started
    35. 35. Result #2: Amount of materials transferred Transfer of materials which are no more needed 2009 64,035,219 US $ 2010 22,939,795 US $ 2011 35,519,535 US $ 2012 36,664,240 US $ 2013 first 9 months 27,684,419 US $ Total 186,843,208 US $
    36. 36. • • • • • Turkey and health status indicators Turkey Health System and reforms Increase in health expenditure CRMS (Centralized Resource Management System) Case Study : Two problems, solutions and effects • Contribution of IT system to implementation • Conclusion
    37. 37. How CRMS works? Hospital records information about their unneeded or exceeded stocks Hospital which receives the demand for its materials call back in 5 days Hospital which needs material sends request to other hospitals which has exceeded or unneeded stock,
    38. 38. Hospitals record their stocks’ price, amount and other details to web based system
    39. 39. Unneeded and over stock materials can be monitored by hospital and MoH
    40. 40. Hospital that needs material has to make an inquiry for unneeded or over stock materials from other hospitals before purchasing
    41. 41. Conclusions • A reliable, standardized and central inventory system is generated with integration of separate hospital systems. • System enabled inventory planning, making analysis for hospital inventories, implementing macro policies. • Transferring unneeded and exceeded stocks between hospitals was a macro policy implementation which became possible with CRMS. • This policy implementation reached its targets with efficient use of system.
    42. 42. Thank you

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