Kaiser Permanente is an integrated managed care consortium and the US’s largest not-for-profit health plan. As of December 31, 2015, Kaiser Permanente had 10.2 million health plan members, 186,497 employees, 18,652 physicians, 51,010 nurses, 38 medical centers, and 622 medical offices.
Kaiser faced several issues in 2014. First, Affordable Care Act (Obamacare), increasing impact of consumerism, and decreasing reimbursements made it change its cost structure. Second, inventory is a problem within Kaiser. Inventory was driven by nursing at different locations. Nurse not only served patients but also search the needs of products. Moreover, recalled and expired products were discovered manually. Sourcing, distribution, and point of care acted independently. All these reasons drove it high inventory level but no one knew the exact number.
- It made a maintaining procedure cards. The list by doctor of all materials that doctor uses for particular procedures. This information will allow them to see variation of product usage across procedures and surgeons.
- Implement Oracle’s PeopleSoft Applications as ERP system: one item master and scanning process. These help them understand actual cost procedure, accurate inventory, replenishment, and recall management processes.
- Implement a consensus demand management process (Oracle’s Demantra): use science to set inventory level and forecast inputs (shipment history, operation room schedules, and external factors like seasonality and changes to insurance plans).