6 Strategic Benefits of Standardizing Cold Storage Across an IHN

Maintaining the delicate balance between patient care and financial and operational efficiency is the constant dance of the IHN executive. As systems grow, new technologies and standards of care are introduced, payer dynamics continue to shift, and savvy executives are perpetually seeking creative opportunities to remove cost from care delivery and preserve operating margins while continuing to improve patient outcomes.

One creative and often-overlooked mechanism for margin preservation is standardizing cold storage across the health system. Since the cold chain touches all major IHN departments and is interwoven into SOPs, cold storage equipment may seem like merely a necessary commodity in health system operations.

But there are potential financial impacts of cold storage failure, such as fines, suspension of services, inventory loss, reputation damage, and endangerment of patients. If not managed holistically, cold storage can erode margin and dry up revenue streams across the system.

This will be the first in a series of blogs unpacking the potential financial and operational benefits of cold storage standardization for health systems. In this blog, we will give an overview of six strategic benefits of cold storage standardization, which we will examine more thoroughly in subsequent blogs.

1. Inventory Protection
2. Maintenance and Labor Efficiencies
3. Consistent Compliance and Quality Standards
4. Purchasing Leverage
5. Vendor Management
6. Aesthetic and Patient Experience

Operating Margin: The King of KPIs for IHNs

For IHN CFOs, COOs, and senior VPs of pharmacy and laboratory services, few metrics (outside of patient outcomes) are more critical to understand and influence than operating margin. Operating margin is a direct reflection of the efficiency with which a health system manages core expenses relative to revenue.

While executives rightly focus on high-profile cost centers such as labor and supply chain management, erosion of operating margins frequently occurs by attrition, and little by little, a thousand small leaks sink the ship. When health systems allow a mix of different cold storage brands, models, and service providers, inevitable inefficiencies arise and quietly eat away at financial performance.

The six benefits of cold storage standardization we will discuss have the potential to directly or indirectly influence operating margin and improve health system financial performance.

Inventory Protection: Reducing Waste and Loss

The primary purpose of cold storage in the IHN is the protection of valuable medications, vaccines, patient samples, reagents, diagnostic kits, and blood products.

When storage conditions vary across brands and models, the risk of temperature excursions and equipment failures increases, leading to product loss, compliance violations, and potential patient safety risks. A single excursion, especially in a department such as a specialty pharmacy or diagnostics lab can mean thousands of dollars in wasted inventory.

By standardizing cold storage across the health system with a reliable cold storage vendor, IHN executives can avoid inconsistencies in temperature performance that lead to temperature excursion events. Standardization also enables more streamlined fleet management as the health system and the vendor work together to record age, performance, and maintenance records for accurate capital budgeting.

Maintenance and Labor Efficiencies: Lowering Service Costs and Downtime

Cold storage maintenance can be a significant operational burden, requiring allocation of valuable biomedical engineering resources in the case of failure and end users in some cases for preventive maintenance.

Having myriad cold storage vendors in your fleet causes inefficiencies in maintenance and preventive care operations.

For biomedical engineering teams, each equipment repair requires an initial period of information gathering. Each vendor uses different parts and different internal mechanisms that are incompatible with other pieces of equipment even of the same type and size. This requires a larger inventory of stocked parts to be kept on hand and a wider breadth of equipment information to be maintained by individual technicians.

For end users, each equipment check or preventive maintenance service requires following a different list of manufacturer-specific recommendations, slowing the process and misallocating labor resources.

Cold storage standardization can alleviate maintenance burdens, reduce inventory of on-hand replacement parts, and reduce equipment downtime by accelerating the maintenance process. In some cases, standardization can also be coupled with custom service contracts to eliminate the burden of maintaining cold storage altogether.

Consistent Compliance and Quality Standards

All IHN staff share responsibility for regulatory compliance, but the ultimate burden of compliance falls to the system executives: Chiefs/SVPs of Pharmacy and Laboratory Services. One of the simplest ways to simplify compliance across a system is to standardize cold storage equipment.

By standardizing cold storage equipment, IHNs can ensure uniform compliance with regulations and standards such as USP <797> and USP <800>, NSF/ANSI 456 Vaccine Storage Standard, CAP standards, and other regulations.

Standardization allows IHNs to choose a vendor whose products have been designed and manufactured to meet these standards, streamlining the audit preparation and reporting processes and reducing incidence of standard violations due to improper storage temperature.

Purchasing Leverage: Maximizing Cost Savings and Supplier Benefits

When a health system consolidates cold storage procurement with a single vendor, it gains several strategic advantages, including enhanced purchasing power, cost savings, and strengthened supplier relationships.

Volume-based discounts are mutually beneficial for suppliers and IHNs. The higher volume of equipment ensures revenue increases for suppliers and allows them to reciprocate by offering reduced prices on equipment or offer additional services or benefits to IHNs at lower-than-market prices. Standardization can be a great option, especially for large- and medium-sized IHNs looking to build strong supplier relationships.

Aside from lower prices, high volume can open many doors for the development of creative partnerships and custom solutions as well as negotiation of beneficial contract terms for IHNs.

Vendor Management: Streamlining Operations and Reducing Complexity

Managing multiple cold storage vendors across an IHN creates unnecessary complexity for procurement, facilities management, and service teams. Each additional vendor means more contracts, more points of contact, and more variability in equipment performance and maintenance processes. This level of fragmentation results in administrative burdens, increased service inconsistencies, and inefficient supply chain management.

Standardizing cold storage helps IHNs reduce administrative overhead, streamline delivery and service coordination, improve fleet management and warranty tracking, and reduce complexity for procurement teams, service teams, and department heads who rely on cold storage for daily operations.

Aesthetic and Patient Experience: Enhancing Reputation and Satisfaction

Aesthetics are not just for show. It can be tempting for IHN executives to focus solely on function rather than form. This is a mistake. In the hyper-competitive healthcare market, aesthetic and uniformity of equipment play a subtle, but significant role in patient and staff experience.

Inconsistent, outdated, or mismatched refrigerators project a cluttered, disorganized, and unprofessional appearance, particularly in environments that are highly visible to patients.

Standardization of cold storage equipment can help present a clean, professional environment that reflects the quality standards of the health system, foster confidence in patients, and positively impact patient satisfaction scores and hospital reputation.

For the executive who may be skeptical of the benefits of aesthetic on patient outcomes, here are three articles discussing how aesthetics and design can shape brand reputation and patient experience:

• Impact of Facility Design on Patient Safety
• Impact of Healthcare Facility Design on Patient and Staff Well-Being
• How Design in Clinical Spaces May Influence Patient Outcomes

OTHER BLOGS YOU MAY BE INTERESTED IN...

• A Case Study in Hospital Cold Storage Planning
• The Future of Biologic Therapies and What it Means for Cold Storage
• Hospital Equipment Planning
• Environmental Sustainability in the Clinical Lab

Enterprise-Level Temperature Assurance for IHNs

For IHNs looking to standardize cold storage solutions, Life Science Solutions, a business unit of Trane Technologies, offers customizable cold storage equipment, service, and engineering solutions.

From five cubic foot undercounter refrigerators for patient floors to football-field-sized custom-engineered walk-ins for central pharmacy service centers, Life Science Solutions’ robust portfolio meets medical-grade cold chain requirements for the entire health system.

Solutions are customizable and available with flexible service solutions and extended warranties to reduce operational downtime, streamline fleet management, and assist with capital budgeting.

Life Science Solutions enterprise-level temperature assurance solutions are ideal for hospital renovations, new construction, and centralization projects such as centralized pharmacy service centers and specialty pharmacy facilities.

For more information, contact your representative for Helmer Scientific or Life Science Solutions or submit the quote request form and include the word “standardization” in the Comment field.