Abu Hail Health Center: Materials Management and Procurement Process

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Introduction

Material management and procurement processes are all important parts of PHC supply chains. In order to facilitate efficient supply chains, most PHCs have dedicated software for material coding, inventory management, and medical supply and demand projections. Despite this, most governments, including the UAE, do not have any precise instructions for managing PHC-related materials such as drugs, vaccines, personal protective equipment, medical equipment and the like, in primary healthcare facilities.

Various studies report that inefficient materials management and procurement can cause drug shortage, prolong laboratory investigations, and cause incidents of non-utilization of government-funded health facilities available to the general public. Most drug shortages are caused by improper demand projections, while laboratory on-provision delays are caused largely by equipment malfunctions, employee shortages, and shortages of required reagents.

Management of these resources includes their procurement process, storage, distribution, maintenance, and disposal. The purpose of this paper is to map out and analyze the materials management and procurement processes in Abu Hail Health Center, Dubai, identify the gaps and redundancies in their current SCM and propose a set of solutions and recommendations to improve the situation.

Background

Abu Hail Health Center is a relatively small PHC that provides quality healthcare to the people of Dubai and surrounding areas. It has a total of 141 qualified medical personnel, out of which 47 are doctors and 94 are nurses and paramedics. This PHC is currently under the administration of the Ministry of Health. It was set up in 1999, meaning it is a relatively modern PHC. It possesses good capabilities and resources required for cutting-edge medical treatment (“Abu Hail health center,” 2017).

Aside from standard medical procedures, Abu Hail Health Center operates a well-equipped laboratory with state-of-the-art investigative medical facilities. It also provides radiography services , which include standard radiography and X-ray, ultra-sound, mammography, fluorography, OPG, and other services.

Healthcare Utilization Indicators

Three healthcare utilization indicators that influence the population around Dubai. PHC are socio-economic standing of the population, median age of the population, and quality of offered care. Socio-economic standing stands for how rich the population is. If the majority of patients have jobs and savings, and are not constrained by monetary concerns, they are more likely to utilize PHC facilities.

Median age has a direct correlation to the number of PHC visits, since old age is associated with numerous ailments and diseases. Lastly, the quality of provided care directly corresponds to the level of trust between the patients and the PHC workers, meaning that patients are more likely to attend PHCs with high quality of care. Effective chain supply management has a direct correlation on the last health utilization indicator, and can affect the first one indirectly. Avoiding drug shortages effectively increases the quality of provided care, thus contributing to improving the levels of trust between patients and the medical facility. Other than that, it also helps save money, which in turn helps reduce costs and make healthcare more available to everyone.

PHC Supply Chain Model

The modern theory of supply chain management identifies three supply chain models – Foundation Model, Optimization Model, and Transformation Model (Schwarting, Bitar, Arya, & Pfeiffer, 2011). Abu Hail PHC, as many modern and advanced medical facilities, operates using the Transformation Model. This is a complex model which balances medical costs, medical efficiency, and seeks to ensure positive patient outcomes.

It is classified by its patient-centric approach, meaning that all decisions in regards to supply chain management are taken with patient needs in mind. It implements lean materials management, judges medical products based on their contribution to organizational and clinical goals, and incorporates improvements in clinical protocols in SCM decision-making (Schwarting et al., 2011). The result is optimized operational costs, minimization of mistakes due to human error, through system integration and optimization of procurement processes using the most advanced automated protocols, and reduced organizational purchasing risk due to increased compliance with established supply contracts (Schwarting et al., 2011).

Material Planning and Procurement

In Abu Hail, drug demand forecast is based on utilization data from the previous year. The demand for the current year is formulated by reviewing a number of drugs used in the previous year and adding 10% to the new purchase order (Uthayakumar & Priyan, 2013). The calculated amount is sent to the District Health Office, where the requisition request is reviewed by the pharmacist, who then files the document for the materials to be supplied to the PHC from the Central Store in Dubai.

Abu Hail PHC receives its drug supply from several independent sources, which are (Uthayakumar & Priyan, 2013):

Medical supplies from the Central Store received as Annual Drug Stock.
Drugs received as supply in accordance with various national health programs, in addition to the Annual Drug Stock.
Drugs received by sending a request to the District Health Office.
Procurements of drugs from the local suppliers in accordance with individual supply contracts.

One of the major challenges in this procurement system is the Annual Drug Stock. Although it is given out in amounts based on demand in Abu Hail PHC, its contents are developed on a statewide basis, and not on individual criterions for each PHC. This lack of flexibility means that the PHC might receive plenty of drugs that it does not require, while the amount of medical supplies it actually needs is based on demand would barely be enough to operate with, without causing any potential shortages. This flaw is common in many state-funded PHCs, as they all operate using similar PHC supply chains (Uthayakumar & Priyan, 2013).

In order to make up for the shortcomings of the current system, Abu Hail PHC is forced to work with private medical suppliers in order to purchase the drugs they need, in a case of shortage or an emergency. Although this helps alleviate some of the tension, prices offered by such suppliers are often higher than they would have been if the PHC received the required amount of drugs from government-sponsored institutions (Uthayakumar & Priyan, 2013).

Storage and Stock Entry

Abu Hail PHC has dedicated storage facilities for different materials. The materials are split according to their type – one room is dedicated to storing drugs, injections, and medicines, another – for storing instruments and materials related to X-ray, Laboratory, and Radiology practices, and the third room is dedicated to storing linen. Every room has its dedicated pharmacist or a nurse to help distribute required materials (Denton, 2010).

The stock contains numerous labels that are pre-designated for specific medicines and products. These include stock registers for tablets, syrups, and capsules, surgical equipment, injections, linen, film, reagents, and other supplies. Register template features the date or receiving, name of medicine, quantity, total quantity of balance, stock issued to the department, and expiration date registry (Denton, 2010). This register is updated as soon and as often as it is possible.

The pharmacist reviews the drugs that are near their expiry date, which is within 3 months. In order to ensure that these medicines are not wasted, inquiries are made to other PHCs to find out if they have the need for such medicine. Alternatively, these medicines are used in the PHC setting, should the Medical Officer decide that it is appropriate (Uthayakumar & Priyan, 2013).

Material Disposal

In Abu Hail PHC, drugs are seldom disposed of. Most of them are utilized in an efficient manner prior to their expiration date. However, should any drugs cross the expiration line, they are treated in a similar way to how medical waste is disposed of – they are put in sealed bio containers and delivered to the medical disposal facility, which then conducts the disposal processes in a safe and efficient manner, according to high standards for the procedure (Render & Heizer, 2013).

Laboratory-related Material Procurement and Maintenance

Laboratory equipment and reagents are largely supplied by the DHO at Dubai. The operation of procurement is the same as for drugs – the PHC sends a report of material use for the last year and requests the same quantity of materials and reagents plus 10%. The equipment is used until a malfunction occurs, after which obligatory maintenance is in order (Genovesi, 2015). Maintenance checks are performed from time to time to assess the safety level of particular apparatuses. Once the equipment is beyond repair, it is then utilized for scrap, and an indent is sent to the DHO.

The main issue with this approach is that eventual malfunctions of laboratory equipment cause delays in providing analyses, which in turn is connected to certain financial expenditures and health-related risks, as the inability to provide accurate laboratory analyses in time can be detrimental to the overall quality of healthcare provided in the facility (“Manual for procurement,” 2013).

Radiology-Related Material Procurement and Maintenance

Radiology departments possess a great number of various devices to assist in all sorts of medical endeavors. The equipment involved in radiology practice includes static X-ray units, mobile X-ray units, Fluoroscopy units, CT, MRI, Mammography, Ultrasound, and Radiography equipment (“Manual for procurement,” 2013). X-ray units all require a film to project the results of the scan onto, whereas the rest of the units require liquid conductors to be placed on the body of the patient, in order to increase the accuracy of the scan. All mechanisms require maintenance and spare parts, as time goes on.

Once more, the procurement process for this equipment and all related materials is similar to that of drugs – they are supplied by the DHO. When it comes to maintenance, the PHC technicians on site perform small repairs and regular maintenance procedures. In the case of serious breakdowns, the equipment is either sent to maintenance to the office of the company that provided it or is disposed of and sold to scrap, should the wear-and-tear prove to be beyond repair. Although these malfunctions are infrequent, they pose a serious danger to hamper or paralyze the work of the entire radiology department, should malfunctioning equipment be one-of-a-kind (“Manual for procurement,” 2013).

Another issue that is raised among the staff of Abu Hail PHC is that the staff of radiology department is rarely included into decision-making in regards to procurement and maintenance of their respective equipment. The PHC largely operates on DHO generalized guidelines rather than out of its own practical concerns.

Conclusions and Recommendations

Although Abu Hail PHC maintains a good level of efficiency when it comes to PHC supply management and procurement strategies, there are several issues that may pose potential risks in case of a deficit of required supplies and materials. In this section, innovative strategies would be provided to deal with some of the more prominent issues with Abu Hail PHC’s Supply and Management System (Render & Heizer, 2013):

DHO Generalized Annual Drugs Stock. Although the PHC manages to deal with the issues of the Annual Drug Stock not meeting the actual demands of the PHC by exchanging medicines that are near their expiration date with other medical facilities, and by relying on local suppliers to make up for the deficit whenever it is required, these measures do not offer a long-term solution. In order to change the DHO policy towards Annual Drugs Stock, Abu Hail and other government facilities should promote a more diversified approach, in order to ensure every PHC receives its Annual Drugs Stock in accordance with their specifications and needs (Uthayakumar & Priyan, 2013).
Demand Forecasting. The current method of demand forecasting is standard for many medical facilities around the world. However, while it is considered staple in many manager books, it fails to take certain issues into account, which could cause a potential deficit. Other parameters that need to be taken into account during demand forecast are (Uthayakumar & Priyan, 2013):
1. Trends in medicine during the last two years (not one).
2. Prevalence of certain diseases in the country and particular region.
3. Analysis of patient age groups.
4. Population growth rates within the immediate area around Abu Hail PHC.
Involvement of Laboratory and Radiology Departments in Procurement Processes and Decision-Making. As it stands, Abu Hail PHC practices a top-down approach, where the decisions are made at the top, using annual reports and standard management practices. It leads to generalization of the needs of departments, which is further extrapolated by the DHO. In order to promote accuracy and efficiency in lean supply management, representatives of these respective departments are to be involved in procurement and decision-making processes.
Preemptive Maintenance Practices. Although it is addressed to some degree during regular scheduled maintenance procedures, Abu Hail PHC addresses serious equipment maintenance issues post-factum, which usually happens after equipment suffers a malfunction. This may cause unnecessary delays. Two potential strategies can help deal with these issues (“Manual for procurement,” 2013):
1. Major preemptive maintenance procedures that include replacing certain parts and pieces of the equipment prior to it suffering a major malfunction. This could be used during low seasons, where patients are not as many, which would allow to perform maintenance without risking any inconveniences.
2. Fixed asset lifecycle concept. Although it may be too expensive to perform with certain equipment, particular instruments, devices, and mechanisms should be replaced by the DHO after a certain period of time, in order to avoid potential malfunctions.
Incorporating Total Quality Management Model into PHC Supply Models. It is a relatively recent approach to management implemented on a horizontal level between end users, suppliers, and distributors of medical supplies. There are three ways in which incorporating TQM will improve overall efficiency at the Abu Hail PHC (Render & Heizer, 2013):
1. More employee involvement in decision-making in regards to supply matters and procedures.
2. Reducing the amount of steps required to procure required medicine, instruments, equipment, and tools.
3. Quality improvement of patient care will also reduce the amount of medicine otherwise wasted due to expiration date and other factors, which will contribute to avoiding shortages.

References

Abu Hail health center. (2017). Web.

Denton, B.T. (2010). Handbook of healthcare operations management. New York, NY: Springer.

Genovesi, L. (2015). The procurement process. Web.

Manual for procurement of diagnostics and related laboratory items and equipment. (2013). In World Health Organization. Web.

Render, B., & Heizer, J.H. (2013). Operations management: Sustainability and supply chain management. New York, NY: Pearson.

Schwarting, D., Bitar, J., Arya, Y., & Pfeiffer, T. (2011). The transformative hospital supply chain: Balancing costs with quality. New York, NY: Booz&Co.

Uthayakumar, R., & Priyan, S. (2013). Pharmaceutical supply chain and inventory management strategies: Optimization for a pharmaceutical company and a hospital. Operations Research for Healthcare, 2(3), 52-64. Web.

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