Can you provide an outline for implementing an effective purchasing process for our 11-physician group? We have grown from 5 to 11 physicians in the past 17 months adding staff and services which require more supplies.
Team leaders order for the respective departments (cost centers): 00 (administration), 01 (billing), 03 (clinical), 04 (diagnostics), 05 (front office), 06 (medical records), 07 (transcription).
We do have a form that staff complete, submit to team lead[er] who authorized the order. The madness occurs after the orders are placed, received, returned, etc.!!!
Thank you for your question to Medical Management Associate's Ask a Consultant. Purchasing policies and inventory management is a broad subject which is often overlooked by medical practices. Many practices like your own may have effective components of a purchasing program, but have not developed a complete program.
The following are issues to consider in developing a purchasing program:
Even more important then purchasing, the control and distribution of supplies is critical in an inventory management system. There are many methods, manual and automated, that can assist in this component of the program.
- First, define the personnel that will be responsible for managing the process, including the materials manager for the overall operation and departmental inventory managers, identify individuals to take the inventory, order the supplies, and receive the supplies and disburse them, and oversee the accounting function for these activities.
- Establish budgets for each of the various departments for general supplies, special supplies and equipment.
- Educate the department managers (team leaders) on their budget responsibilities.
- Establish inventory levels for each department, including desired levels and reorder points. These include information on the number of days required to receive a shipment once ordered and defining usage rate by department.
- Evaluate the ability to utilize a central storage versus exam room, work areas or desks for storing supplies.
- Develop inventory forms for each department with desired levels so as to facilitate the reorder process.
- Organize the purchasing department to facilitate the consolidation of orders and the reordering process. This can be accomplished through a simple data base program.
- Depending on the office's layout, when orders are received ensure the contents are checked and the receipt form approved by the team leader or the person receiving the shipment with the order being returned to the payables department.
- Develop standard forms for processing returns.
- Implement process controls to ensure that the policies are being adhered to.
- Provide department managers (team leaders) with periodic feedback on their work and their expenditures versus their budgets.
Although there are many nuances to consider with each part of the program development process, this outline should give you a good start on developing an effective purchasing program.
While an effective purchasing program is important, especially in larger medical practices, we offer a word of caution. The intent of a purchasing program is to improve the financial efficiency of the operation. Do not allow the program to become so cumbersome that your staff spends more time adhering to the program than they do in more important areas of the practice.
Russell B. Still (bio...)
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