10 Reasons Why Clinics Should Implement a PAR Level Strategy and How To Do It Successfully
PAR (Periodic Automatic Replacement) levels, or "Par Stock" levels, refer to the optimal quantity of medical supplies and equipment a private clinic should maintain to ensure smooth operations. PAR levels are essential for several reasons in private clinics:
Patient Care and Safety: Maintaining adequate PAR levels ensures that the clinic has the necessary supplies and equipment for optimal patient care. From bandages and medications to diagnostic tools, having the proper inventory helps address patient needs promptly and effectively, contributing to their safety and well-being.
Operational Efficiency: Knowing and maintaining PAR levels helps prevent stock outs or overstock situations. Stockouts can disrupt clinic operations, leading to delays in patient care, while excess stock ties up capital and storage space. Efficient inventory management ensures the clinic runs smoothly and is well-prepared to handle patient demands.
Cost Control: Keeping track of PAR levels assists in cost control by minimizing excess inventory and reducing the risk of waste. This is particularly crucial for private clinics, which often operate on tight budgets. Clinics can allocate resources more effectively and reduce unnecessary expenses by optimizing stock levels.
Emergency Preparedness: Private clinics must be prepared for unexpected events or emergencies. Maintaining appropriate PAR levels gives clinics a stockpile of essential supplies, ensuring they respond promptly to emergencies without compromising patient care.
Regulatory Compliance: Private clinics are often subject to regulations and standards that mandate the availability of specific supplies and equipment. Adhering to these regulations is essential for maintaining the clinic's license and accreditation. Monitoring and meeting PAR levels help ensure compliance with these requirements.
Consistent Quality of Care: Consistency in medical supplies and equipment availability contributes to consistently delivering quality healthcare services. Preventing the scarcity of critical items for the medical practice builds trust with patients and maintains a positive reputation in the community.
Vendor Relationships: Knowing PAR levels facilitates better communication with suppliers and vendors. Clinics can establish efficient ordering processes and negotiate favorable terms based on their consistent and predictable needs.
Workflow Optimization: Properly managed PAR levels contribute to the optimization of clinic workflows. Staff can focus on patient care and administrative tasks without disruptions caused by shortages or excessive inventory.
Preventing Product Expiry: Medical supplies often have expiration dates, and private clinics must be vigilant in managing their inventory to avoid the expiration of essential items. Monitoring PAR levels helps rotate stock effectively, minimizing the risk of using expired products, which can have profound implications for patient safety and clinic compliance.
Adaptation to Patient Demand and Seasonal Variations: Patient demand for particular services or procedures may vary throughout the year, and private clinics must be adaptable. By regularly reviewing and adjusting PAR levels based on historical data and seasonal trends, clinics can ensure they have the right resources to meet changing patient needs without unnecessary stockpiling. This flexibility is vital for maintaining patient satisfaction and clinic efficiency.
PAR levels impact patient care, operational efficiency, cost control, and overall clinic reputation. Proper inventory management with a PAR level strategy ensures that clinics are well-equipped to provide high-quality healthcare services to their patients.
Implementing a PAR-level strategy in a clinic involves:
Setting predetermined levels for each item
Regularly monitoring inventory levels
Automatically replenishing supplies when they fall below the established PAR levels
Here's a step-by-step guide on how to build a PAR-level strategy for your clinic:
Identify Critical Items and Set PAR levels for each identified item
Determine which items are essential for the daily operation of your clinic. This may include medical supplies, office supplies, pharmaceuticals, and other consumables. PAR levels should represent the minimum quantity of each item on hand before reordering.
Clinicians should conduct a comprehensive inventory analysis to identify critical items and set PAR (Periodic Automatic Replenishment) levels. Begin by categorizing items based on their importance to daily operations and patient care. Necessary items may include essential medications, life-saving equipment, and items crucial for specific medical procedures. You should also assess historical usage data, taking into account seasonal variations and any upcoming changes in patient volume. It is recommended to consult healthcare professionals to determine which items are vital for patient safety and optimal care delivery.
Other things to consider when establishing PAR levels are; the lead time for replenishment, usage patterns, and a safety stock buffer to account for unexpected demand or delays.
Remember that PAR levels are defined differently for each category of inventory items. The considerations for calculating the PAR for cleaning supplies are not the same as those for surgery supplies. There are many formulas to calculate PAR levels:
PAR Level = Average Usage + Safety Stock
PAR Level = [(Average Usage per Period × Lead Time in Periods) + Safety Stock]
PAR level = (amount of inventory used each week + safety stock) ÷ (number of deliveries each week)
PAR Level = (Reorder Point + EOQ) - (Minimum Usage × Lead Time)
PAR Level = Maximum Usage × Maximum Lead Time + Safety Stock
PAR Level = (Average Usage during Peak Season × Peak Season Duration) + Safety Stock
PAR Level = (Average Usage per Lead Time + Z-score * Standard Deviation of Usage during Lead Time) + Safety Stock
The process can be as the institution considers necessary to achieve their goals. Some teams implement conservative methods to calculate PAR levels, but digital products can accelerate the work, making more accurate estimations and preventing burnout or the medical staff. Mika has developed a solution that uses machine learning and advanced statistics to obtain accurate PAR levels and manage a clinic inventory effectively. You can learn more here.
Regularly review and adjust PAR levels based on evolving clinic needs and changes in medical practices, ensuring a well-maintained inventory that supports uninterrupted healthcare services.
Identify reliable vendors
Establish relationships with suppliers who deliver timely deliveries and quality products.
Start by defining your clinic's needs, including medical equipment, supplies, pharmaceuticals, or other services. Seek recommendations from trusted colleagues, explore online reviews, and check for industry certifications to ensure vendors comply with healthcare standards. Conduct a comprehensive background check, assessing the vendor's financial stability, history, and legal issues. Request references from other healthcare facilities and inquire about the quality of products or services and the vendor's ability to meet delivery deadlines. Compare costs but prioritize quality and negotiate clear contract terms with provisions for dispute resolution.
Additionally, you could visit vendor facilities to observe operations firsthand and establish a personal connection. Monitor vendor performance regularly and stay informed about industry trends to adapt to changing needs. By following this comprehensive approach, you can build a network of reliable vendors that contribute to your private clinic's smooth and efficient functioning.
Set an Inventory Management System
Implement an inventory management system that allows you to track stock levels, monitor usage patterns, and set up automatic reorder points based on PAR levels.
It is essential to monitor the inventory levels of each item regularly. This can be done through automated systems that provide real-time updates on stock levels.
Consider also implementing electronic ordering systems or other methods that facilitate quick and accurate reorder placement. For example, when the inventory level falls below the established PAR level, receive a notification signaling the need to reorder. Additionally, you can set up automatic purchase orders when these triggers are reached.
Finally, it is essential to establish a smooth process for receiving and verifying incoming orders, including checking the quantity and quality of items acquired against the order, updating the inventory system, and addressing any discrepancies promptly.
Periodic Review and Adjustment
Periodically review the PAR levels and adjust them based on changes in demand, seasonality, or other factors that may impact usage patterns.
Remember that continuous improvement is essential for an effective PAR-level strategy, so the insights should be shared with other clinic areas.
Implementing a PAR-level strategy can contribute to efficient inventory management, reduce the risk of stockouts, and optimize the use of financial resources in your clinic. Regularly assess and refine your strategy to adapt to changing circumstances and improve performance.
Currently, there is a limited supply of software that works with great precision on PAR levels. Clinics require a solution that can provide more accurate and quick calculations, as the results not only impact the institution's finances but also the experience and care received by patients.
Many clinics have been forced to create their own assessment and setting processes for PAR levels. However, due to the complexity of the process, they only manage to do it once or twice a year at most, limiting the benefits they could obtain with more frequent evaluations. Ideally, it would be possible to adjust PAR levels according to the trends that arise throughout the year, and the information should be shared with key staff members for collective decision-making. That is the reason why the Mika Health team has strived to build a solution that can help hospitals perform their PAR level calculations more quickly and effectively. We know that with better inventory control, there is less waste and more opportunities for healthcare services and medicines to benefit more patients. If you would like to learn more about this solution, you can access our demo with a personalized guide from our team. Request it here.
Clinics can significantly enhance the health system by implementing par levels, which ensures optimal inventory management. Maintaining appropriate par levels for medical supplies, equipment, and pharmaceuticals allows clinics to operate efficiently, reducing the risk of stockouts or overstock situations.
By preventing shortages, clinics can consistently provide necessary medical services, minimizing disruptions in patient care. Additionally, efficient inventory management enhances financial sustainability, as it helps clinics control costs, allocate resources effectively, and reduce waste. Ultimately, implementing par levels contributes to the overall resilience and effectiveness of the healthcare system, promoting better patient outcomes and resource utilization.
