Inventory Management at a Chilean Hospital Pharmacy: Case

Study of a Dynamic Decision-Aid Tool

Question.1 Read the given attached Case Study carefully and highlight the main points of the
case and any other issues that you can identify.

The main contribution of this case study is the presentation of an effective methodological
framework for cost-effective medication procurement and inventory management that addresses
the common issues that rise in public healthcare systems.

To improve budget management, control inventory levels, and to primarily ensure patient
service levels, some authors have resorted to different methods to improve hospital purchasing
and inventory management. For example, an external network of medicines deemed trivial by
hospitals proposes a delivery system, better aligns with providers, reduces inventory levels, and
maintains the quality of patient care; The hospital uses direct supply chain management
systems. Seville, Buy, for example, Stock Optimization and Customer Satisfaction.

In this paper, The methodological development and obtained results from addressing a
medication procurement and inventory management problem at the Hospital Regional de Talca
(HRT) is the most important healthcare center in the region , the development of results-solving
methods for resolving the problem of drug procurement and inventory management (an
administrative district of Chile) Which has more than 1 million people). .
In human resources, like in most Chilean public health centers, protocols are the norm
for the purchase and storage of medicines.

(1) Emphasizing the Agency's budget, the percentage of total drug spending in the HRT
budget increased from 12% in 2010 to 14% in 2018 (data from the Chilean Ministry of
Health).

(2) The damage caused by the termination of employment was very severe;

(3) Failure to provide complete and timely prescription medications for patients, only
87.7% follow up, compared to the national average of 96.3% in 2019)

● To meet the demand for treatment, it is usually necessary to distribute medications and
medical supplies to treat a particular disease. To that end, they explain how important it
is for hospitals to know when and how to buy management equipment. Additionally, as I
have shown, healthcare systems are severely affected by demand uncertainty.
Therefore, effective management tools must have a strategy to combat this trend.

● There is a need to address the growing risks to public health supply chains to address
growing risks. And decision systems are able to visualize the variables of demand,
dynamic procurement, and inventory of risks. According to the latest example of a
 method, the authors called Chinese general rolling. As shown, to avoid any functional
demand and ensure supply and total storage costs.

Inventory Planning: A Brief Overview

● From an economic point of view, raising and lowering inventories poses cost issues for
all types of businesses (e.g. Kodak, refundable industry, healthcare industry). The
common denominator is the same in all industries. That is, manage inventory levels to
improve the purchasing process and provide the right service. Therefore, when
surpluses occur, companies must spend more to maintain excessive inventory levels,
which can lead to product obsolescence.

Case Study of Regulation and Local Context

● Chilean government hospitals, such as HRT, are required by law to regulate the
purchase of medicines and medical equipment under Rule 20724, which is part of the
Public Health Act. The law requires that Münster de Sloid de Chile (MINSAL) prescribe
so-called pharmaceutical weapons equivalent to all essential drugs, and therefore each
of its local distribution areas and local hospitals. It must be firmly guaranteed. This code
of conduct replaces CENABAST as HRT's leading provider. However, when the
CENABAST drug is out of stock, HRT must be purchased from other suppliers.

● On average, between 2010 and 2018, pharmacy expenditure was 13.8% of the total
budget of the institution.

● This increase in expenditure has affected hospital’s total budget and is related to the
existence of gaps/difficulties in the management of the pharmacy which has created
(i) difficulties in determining actual demand due to low exposure sensitivity in records;
(ii) procurement planning.
(iii) control of stock levels and reduction of drug expiry dates;
(iv) Reduced commitment due to pharmacy entry reports.
(v) limit existing information systems to administrative support.
(vi) lack of coordination in the use and distribution of drugs in warehouses;
(vii) Incorrect coordination and differences in the volume of purchases between the
Covered Unit and the Final Purchase Unit.

Question. 2
a) What actions were taken in the case?
b) Were these actions the most appropriate and why?

c) Were there any consequences of the actions taken?

d) Were actions/procedures in line with existing codes of practice, policy or theories?

2 Format for Case Study Analysis: (Read the question closely and analyze what they are
requiring you to do the below given points)
1. Introduction
2. Background (relevant facts/figures)
3. Identify the Problem/Issues
4. Proposed Solutions (Explain)
5. Analysis of the study
6. Recommendations