Chicago - October 11, 2005 – The Association for Healthcare Resource & Materials Management (AHRMM), with the support of the Healthcare Financial Management Association (HFMA), recently developed a definition for supply expense in healthcare organizations. A standard definition will help hospitals and other healthcare organizations compare their supply costs to others in the field and look for ways to improve the care they provide to the communities they serve.
AHRMM’s Benchmarking Task Force, including a representative from HFMA, has been working since January of 2005 on Phase I of its benchmarking project to provide valuable information to the entire field. The newly crafted definition of supply expense is: “The net cost of all tangible items that are expensed including freight, standard distribution costs, and sales and use tax minus rebates. This would exclude labor, labor related expenses, and services as well as some tangible items that are frequently provided as part of service costs.” The definition is accompanied by a list of items identified by AHRMM and HFMA to be included in supply expense reporting. The list is posted on both organizations’ Web sites and also denotes items that should not be included in supply expense reporting.
"Creating a standard to consistently identify categories and measurements of supplies and supply-related expenses will help AHRMM prepare a much needed supply expense benchmarking tool for the healthcare field,” said Deborah Sprindzunas, AHRMM’s executive director. “AHRMM’s role as a leading authority in healthcare materials management makes it a natural fit to conduct a national benchmarking study.”
Richard L. Clarke, DHA, FHFMA, president and chief executive officer of HFMA stated that “cost containment is vital to the overall financial health of hospitals. With hospitals facing increasing pressure on their margins, control of supplies and supply-related expenses is vital to any successful healthcare financial strategy. HFMA is pleased to represent its members, and collaborate with AHRMM in helping to define this important standard.”
Hospitals and healthcare institutions are encouraged to use these documents as a tool to ensure accurate comparisons of similar organizations and track trends in supply expense going forward. This effort has laid the groundwork for a national supply expense benchmarking study for the field, and as it moves into the next phases will require the active participation of all AHRMM members, and assistance from the field at large.
About AHRMM
The Association for Healthcare Resource & Materials Management is the leading national association for executives in the healthcare resource and materials management profession. A personal membership group of the American Hospital Association, AHRMM serves more than 3,400 active members. Founded in 1962, AHRMM prepares its members to contribute to the field and advance the profession through networking, education, recognition, and advocacy.
About HFMA
HFMA is the nation's premier membership organization for more than 33,000 healthcare financial management professionals employed by hospitals, integrated delivery systems, managed care organizations, ambulatory and long-term care facilities, physician practices, accounting and consulting firms, and insurance companies. Members' positions include chief executive officer, chief financial officer, controller, patient accounts manager, accountant, and consultant. HFMA offers ideas that work including professional development opportunities, information on key issues, technical data and networking opportunities, with the ultimate goal being to create a more supportive environment in which members do their business. For more information, visit the Association’s Web site at www.hfma.org.
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