Inventory systems and controls in a state-owned hospital : an evaluation

Abstract

Purpose: Health systems worldwide are facing a dynamic, fast changing environment with the continuous emergence of new threats. This is also true for Malta, where there is growing demand for healthcare, mainly as a result of an ageing population and prevalence of chronic diseases. To ensure accessible health services, excellent management of the available resources are required. Thus, this study attempts to evaluate the inventory system of medical stock and the applicable internal controls pertaining to such inventory at the state-owned hospital. Design: This dissertation takes the form of a qualitative study, where the objectives were achieved through the carrying out of descriptive and exploratory research using the case-study research method. Semi-structured interviews were held with high-ranking personnel (three) and key personnel (eight) from relevant departments within the state-owned hospital. Findings: This study ascertained that even though each department has its own way of managing inventory, the procedures for ordering, delivering, holding and dispensing medical stock are very similar. Any differences noted were traced to the items’ particular characteristics. With regard to internal control on medical stock, it became apparent that this is also the responsibility of the department managing that stock, suggesting that there is no segregation of duties. Conclusions: The findings concluded that inventory management methods and control techniques developed for an industrial setting may be used, to an extent, in a state-owned hospital. Research results elicited the importance of medical stock availability, which presents challenges to the determination of optimal quantities held in stock. Even though inventory control techniques may suggest lack of segregation of duties, collective efforts from those responsible for stock led to financial benefits and enhanced inventory systems. Implications/Value: Though cost-benefit analysis and provision of training to staff might be required, it is hoped that the recommendations provided in this dissertation are considered for the enhancement of inventory systems and controls.