The Healthcare Hub

A Primer on Purpose at the GHX Supply Chain Summit

kconway@ghx.com — Wed, 09 May 2012 00:03:00 GMT

After working with him for nearly a decade, I finally had the chance to meet Gartner’s lead master data management analyst, Andrew White, in person today. He kicked off the "Big Data" track at the 2012 GHX Supply Chain Summit, helping the audience get some perspective on what can be an overwhelming subject for many. Andrew said, "it’s not really about the data," but rather the business objective you are trying to achieve. It seems like an obvious point but one that is often forgotten when we are too focused on the challenges around data created, stored, shared and used in healthcare. Think about electronic health records (EHRs) as an example. Many healthcare systems have been so focused on meeting the requirements of meaningful use in time to qualify for federal funding that they forgot to consider whether their systems would communicate with EHRs deployed by other providers. And isn’t a primary purpose of EHRs to make sure that providers responsible for specific patients have the ability to share information in order to better coordinate care for those patients?

Another point we often forget is the importance of standardized processes. In the another track-this one on ‘Standardizing for Higher Quality , Greater Savings” - Dennis Black of BD cautioned those working on data standards to remember the importance of establishing common business practices and rules. He gave an example of a customer who began ordering products using GTINs, the GS1 standard for product identification. That customer used the 14-digit GTIN, but also included the leading (01) that often precedes the GTIN. To make sure the orders would not fail, BD would have to strip out the (01), which just adds work to a process that the GTINs were supposed to streamline. Dennis noted that organizations like GS1 and GHX both have users groups looking at best practices around the use of data standards, and he encouraged organizations to add process improvement to their standards project plans.

Rosalind Parkinson, chief supply chain officer at the Ohio State University Wexner Medical Center, joked in that same session that those in healthcare may have become too accustomed to bad practices and derive some satisfaction from solving problems that would not need to be solved IF we only focused on the bigger picture, which takes me back to Andrew White’s point. Without a clear understanding of what we are trying to accomplish, how can we measure success along the way? Once again, using data standards as an example, I think we can get misguided just counting how many organizations have enumerated their locations with the GS1 organization identifier, the GLN, or how many manufacturers have assigned GTINs to their products. Yes, it’s a step in the right direction, but the bigger issue is how many organizations are using those standards, in business processes, and to what purpose.

For example, in addition to more efficient supply chain processes, product data standards can provide better visibility into product utilization, which in turn can improve the revenue cycle, recall process, demand planning, inventory management, and clinical efficacy, among others. Understanding the various purposes for the data can also help streamline how we collect and use that data, a topic being addressed by the providers and suppliers involved in GHX’s implantable device supply chain initiative. At this morning’s opening session, GHX shared some of the key findings from research conducted in this space over the past two years, along with an update on work being done to standardize what are now highly manual, duplicative and disjointed processes in the OR and Cath Labs. Today, clinicians, materials management personnel, and vendor representatives are all capturing data on the products used in surgical procedures, but for different purposes: patient billing, the implant log, purchasing transactions, and supply chain operations. But they are all doing it in different and often manual and therefore error-ridden ways. As a result, there can be discrepancies in the data, which can compromise quality and cost, while fueling the mistrust that exists between many of the parties involved.

But progress is being made, with GHX announcing today that six providers and four manufacturers are now engaged in pilots to automate data capture, the first phase in creating an industry solution for the implantable device supply chain. No doubt, it will be a monumental exercise in change management, but this morning, representatives of the some of the providers and manufacturers working with GHX on this initiative said they recognize that they share a common problem and are committed to finding a common solution. As one of the speakers, Dale Locklair of McLeod Health, explained: clinicians, manufacturers and healthcare delivery organizations are like a three-legged stool supporting the patient. If "we all" (did I mention Dale’s from South Carolina) don’t work together, we will fail at our ability to care for the patient – and isn’t that really our primary objective.
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A Standing Ovation for Standards

kconway@ghx.com — Tue, 20 Mar 2012 11:17:00 GMT

I am in Sydney, Australia for the GS1 Global Healthcare Conference, which convened this morning. Arriving over the weekend, I had the opportunity to tour the Sydney Opera House. I was struck by the story of how the shells that comprise the famed design of the complex were constructed. The story holds a lesson for those of us working to increase standardization in healthcare, whether it be the adoption of data standards or more standardized processes.

First the story: It took Danish architect Jorn Utzon three years to come up with the solution to the structural engineering challenge that building the shells presented and that structural engineers had declared unsolvable. Utzon derived the final shape of the shells, according to the opera house website, “from the surface of a single imagined sphere, with each shell composed of pre-cast rib segments radiating from a concrete pedestal and rising to a ridge beam.”

Utzon’s solution came just in time, as construction on the foundation of the complex had begun several years earlier, and many feared there would be no answer by the time the infrastructure had been completed. Utzon had argued that construction should not begin until he had completed the design, but the government insisted the work begin immediately.

Despite this triumph, Utzon resigned from the project before it was complete, after many of the delays and cost overruns were blamed on him. The project, originally estimated to take four years at a cost of $7 million dollars, ultimately took more than three times as long to complete at a price tag over $100 million. Ironically, it was Utzon’s spherical design that enabled the roofs to be constructed in a pre-cast fashion, which greatly reduced both time and cost.

So what does this have to do with healthcare and standards? If you think about it, the real genius in Utzon’s design was that the ribs supporting the structure were all the same, enabling them to be mass produced according to standard specifications. Without this ability to mass produce the ribs, I wonder if the Opera House would have ever been built or if it would have been built in the manner that has made it one of the true icons of modern architecture. Bravo to standardization.

If you are interested in standards and standardization in healthcare, I encourage you to attend the 2012 GHX Supply Chain Summit. There, we will explore, among other topics, the potential for standardization to improve quality, while reducing costs, in healthcare.

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UDI: Not Meaningful Yet

kconway@ghx.com — Fri, 24 Feb 2012 15:01:00 GMT

The proposed rules for meaningful use stage 2 were finally published in the Federal Register last night, albeit AFTER the keynote address by National Health IT Coordinator Farzad Mostashari, M.D. at the HIMSS 2012 conference in Las Vegas yesterday morning – just further testament to the fact that Washington does not always meet its deadlines. (Oh, wait, is that a surprise?)

Also not surprising is the fact that there was no mention of capturing the unique device identifier (UDI) in electronic medical records, despite the fact that FDA and the Office of the National Coordinator begun working on what that might look like. It’s not surprising because the proposed final rule for UDI is also not out yet. Rumor has it that it’s fallen trap to those fearful of issuing too many regulations during a presidential campaign, but as we all know from the primary season, things can change quickly and often in the world of presidential politics.

Meanwhile, a bit of an old fashioned letter writing campaign has begun. Earlier this month, Congresswomen Lois Kapps and Jan Schakowsky sent a letter to the Office of Management and Budget, calling for an expedited review and progress report on the status of the proposed rule. That call was quickly echoed in a letter from Senators Kohl, Grassley and Blumenthal, and just last week by five industry trade associations. What might come as a surprise is that two of those associations represent the supply side of healthcare – the Health Industry Distributors Association and the Medical Device Supply Chain Council, which some would expect to be resistant to further regulation. All five organizations, which include the Association for Healthcare Resource and Materials Management or AHRMM (the supply chain association of the American Hospital Association), Strategic Marketplace Initiative (whose membership includes providers, suppliers and technology companies), and the Healthcare Supply Chain Association (representing group purchasing organizations), all indicated they support the use of UDIs in the healthcare supply chain, although they were quick to note that they had not had the opportunity to review the specifics of the proposed draft FDA rule. Notably absent from the letter writing campaign was Advamed, which represents companies that produce medical devices, diagnostic products and health information systems.

All said (or written) and done, I fully expect UDI to become a reality, although no one is sure when. I had a chance to speak with someone from the FDA Center for Devices and Radiological Health at this week’s HIMSS conference and she said work continues toward creation of a UDI database, just as many of the suppliers working with GHX (especially makers of implantable devices) are busy getting their shops and production lines ready for UDI. Meanwhile, while hospitals and other healthcare providers have plenty on their technology plate right now – with EMR implementations, the pending transition to ICD-10, and new quality data reporting requirements, among others – consideration should be given to how they will eventually capture and use the UDI. After all, as the FDA has stated many times since Congress originally passed the law requiring the UDI (back in 2007), it can mandate that suppliers label their products, but real value comes when we actually use the same language to identify the products used in the patient care.

*As a matter of full disclosure, I am a member of the AHRMM board of directors

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From Trash to Technology: A better way to document supplies at the point of care

kconway@ghx.com — Mon, 20 Feb 2012 16:21:00 GMT

Later today, I will climb on the plane and fly to Las Vegas to join 20 to 30 thousand of my colleagues in healthcare IT for the 2012 HIMSS Annual Conference and Exhibition. Sadly, once again this year, the role of the supply chain in meeting some of our most critical clinical and financial challenges in healthcare reform is absent from the agenda - with one notable exception. An impressive group of experts – from medicine and technology (including EMRs, clinical documentation, RFID, and system integration) will meet Wednesday afternoon at HIMSS to discuss the problems associated with inaccurate and incomplete clinical supply documentation at the point of use.

Research has shown that manual, duplicative and disjointed processes in the OR and other procedural suites result in more than $5 billion in waste each year in the US alone. To illustrate the point, a colleague recently told me about an OR that throws packaging from supplies consumed duriung a procedure into a garbage bag and uses that for supply documentation after the fact. When I mentioned this to others, they commented, well, at least that hosptial has a process in place.

In addition to automating supply capture at the point of care, we need better integration between clinical, financial and supply chain systems and – perhaps most importantly – more coordination among those responsible for the functions those technology systems support. Without addressing this problem, we can never expect to achieve the objectives of healthcare reform, not to mention a sustainable healthcare system.

Please plan to join the conversation on Wednesday, February 22 from 1-2:30 pm PT in Room ZENO 4805-4806 at the Venetian Sands Expo Center in Las Vegas. Or if you cannot make it to HIMSS, join the conversation here at The Healthcare Hub blog.

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Focus on Implantables: From Price to Priceless

kconway@ghx.com — Tue, 14 Feb 2012 14:23:00 GMT

There’s been plenty of news about implantable medical devices in recent weeks, but unfortunately, the coverage has been fairly limited in scope (focused primarily on price), which, in my opinion, fails to address the more important issue: how do we manage the use of these devices in a manner that helps deliver quality care in an affordable manner.

So, while Congress, the General Accounting Office and various trade associations debate issues around the price paid for implants, a dozen of the nation’s leading healthcare systems are working with some of the world’s most well-known medical device manufacturers to change the nature of the discussion. These organizations are serving on advisory boards that are helping GHX identify the process change, technology solutions and data sharing policies necessary to help take costs out of the implantable device supply chain. They recognize that it’s not about one segment of the healthcare supply chain making or losing money, but rather about finding shared solutions that can reduce costs for all, without negatively impacting patient care or safety.

The issues being addressed by the advisory boards remind me of the challenges providers and suppliers faced 11 years ago, when GHX was formed to create a technology platform that could deliver supply chain efficiencies and cost savings across the entire supply chain. Back then, the main supply chain improvement strategy employed by most hospitals was to try to get suppliers to lower their prices. At the time, many said the kind of collaboration needed to create a shared solution that would address the operational inefficiencies experienced by both parties would be too difficult. Despite the naysayers, today, the majority of hospitals in the US (not to mention providers in Canada and Europe) are using the GHX platform to conduct business with the suppliers from which they purchase the majority of their medical-surgical products. In other words, while it wasn’t necessarily easy, they proved it could be done.

So, now it’s time to tackle what providers and suppliers say is one of their biggest challenges - the highly manual, disjointed and duplicative processes surrounding the use of implantable devices in the OR and Cath labs. Today, GHX issued a news release, announcing its intention to develop an industry solution for the implantable device supply chain, in much the same way that it built the initial exchange. This initiative will be accelerated by GHX’s recent acquisition of a technology that has been successfully used by hospitals in Europe to capture supply chain and regulatory data for medical devices at the point of care.

Having the right technology, especially technology that has been embraced by clinicians, is important, but the real work is being done by those advisory board members who are changing how business is done in healthcare. As one hospital supply chain executive told me recently, providers pay a lot of attention to the price paid for products but far too little on capturing data on the use of those products. It’s this data that hospitals need to help meet regulatory requirements for reporting on the cost and quality of procedures in which these products are used. It’s the same data that suppliers need to understand market demand, so they can better manage inventory levels to avoid stockouts while minimizing the amount of products that expire before they can be used.

GHX has been conducting primary research in the area of the implantable device supply chain for several years. While the problems associated with current processes may have a different look and feel depending on whether you work for a hospital or manufacturer, or have a clinical or supply chain role, the bottom line is the same: lack of automation and the inability to capture data in an accurate and timely manner is costing healthcare providers and suppliers more than $5 billion annually. That’s more than one quarter of the total amount Medicare spent on procedures involving implantable devices in 2009, according to a recent Wall Street Journal article.

So, while the challenges may seem daunting, the potential benefits warrant the effort. And given the divisiveness in Washington over healthcare reform, the potential for the industry to come together to solve this problem is, in my opinion, nothing short of priceless.

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Get ON my cloud: Why healthcare needs a more holistic view of cloud computing

kconway@ghx.com — Wed, 11 Jan 2012 21:18:00 GMT

I have been pleased to see a number of reports, news releases and blog posts recently about the value of cloud computing in healthcare. One of my favorite bloggers, Tom Finn, with Healthcare Matters, recently wrote about the value of cloud-enabled supply chain management, noting “it’s not a matter of ‘if,’ but rather ‘how’ healthcare providers are going to implement ‘cloud computing’.” Tom also referenced a recent KLAS news release that says 71 percent of providers are deploying or plan to deploy cloud technology. All good news, but I have a concern. In both pieces, and I would argue in most cases, the cloud is being viewed too narrowly in healthcare.

Finn talks about how it can help the supply chain, while KLAS focuses primarily on how clinicians would use it. But the real value of the cloud is its ability to create opportunities for collaboration and data sharing in an environment that is arguably faster to deploy, cheaper and more flexible than traditional on-premise hardware solutions. And as Gartner recently pointed out, an organization’s data is often better protected in the cloud than on-site, where the majority of data breaches occur due to an individual’s actions, not a problem with technology. Faster, cheaper, more flexible and secure are certainly attributes that should resonate with healthcare leaders trying to transform their organizations and the industry in record time—and on a dime. Still, the key point many are missing is how the cloud can help create critical linkages across organizations and functions, providing the kind of visibility to data needed to begin delivering real value in healthcare.

As hospitals begin looking at the application of cloud-based solutions to meet the necessities of true healthcare reform, my hope is that they do not do so in traditional silos. Hospitals should look at how to develop an architecture, along with associated processes and policies, that can meet multiple needs, whether they’re clinical, financial, operational or even regulatory. Part of the challenge in healthcare is that we have looked at these problems distinctly, and as a result, we often deploy independent solutions in a manner that does not create economics of scale or the ability to learn from one another, and one another’s data.

Take demand management as an example. Lack of demand signals, internally within a hospital or healthcare system and/or between providers and suppliers, has resulted in excess inventory levels that increase healthcare costs for all.

Data sharing between supply chain, clinical and financial systems will become even more important as we move to a system based on value, not volume. If we define value (which will drive how hospitals will be reimbursed going forward) as the sum of cost plus quality, then the ability to capture data on the supplies used, especially implantables that can account for more than 50 percent of the cost of a procedure, is critical. Unfortunately, as hospitals scramble to meet stage-one criteria for meaningful use of EHRs, little attention has been paid to the inevitable future requirement that hospitals capture data on medical devices used in patient care.

Accurately capturing this data at the point of use is key to solving a number of pain points in healthcare, including ensuring accurate charge capture, managing inventory, demand forecasting, recall management and comparative effectiveness research. Who knows, this could just be the lever that finally raises the supply chain to the stature it deserves in healthcare.

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Does Wall Street Need Its Vision Checked?

kconway@ghx.com — Thu, 01 Dec 2011 17:14:00 GMT

I was talking to a colleague the other day about how the economic challenges faced by both healthcare delivery systems and their vendors may actually create the impetus we need to better align goals across the supply chain. Misaligned incentives have been a major factor in the historic lack of trust between providers and suppliers, which has hampered their ability to lower the cost of doing business together and, in turn, the cost of healthcare. Unfortunately, Wall Street’s almost myopic focus on top-line growth could impede efforts by many healthcare suppliers to make the kinds of changes I believe are needed to position them for success in an era of healthcare reform.

While the Supreme Court Considers, the Supply Chain Rules

kconway@ghx.com — Thu, 17 Nov 2011 17:47:00 GMT

The US Supreme Court’s decision to review the constitutionality of the healthcare reform law will certainly create some good fodder for political pundits, with the oral arguments occurring during the height of the presidential campaign season, but it does little to address the more pressing question: how to lower the escalating cost of healthcare, without negatively impacting patient care and without waiting on the courts or the political process. No matter where they stand on the law, the hospital and healthcare delivery system executives I talk to all agree, they cannot wait; they have to take action to cut costs NOW.

COLLABORATION: Is it just a nice idea, or can it really deliver?

kconway@ghx.com — Thu, 27 Oct 2011 01:09:00 GMT

Those who have visited The Healthcare Hub before know I spend a fair amount of time talking about collaboration. I’m not alone in my interest in the topic. It’s showing up on agendas of industry conferences and on the research agendas of major analyst firms. The problem is, while most folks say they want to collaborate more, whether with others in their own organizations, or with their trading partners, few really know how to develop a truly collaborative relationship, and more importantly measure the results. Did it really make a difference, for both parties, and is it sustainable and repeatable?

I just finished reading a white paper on supply chain collaboration in healthcare, which provides some real life examples of successful collaborations(with results) and some guidelines on how to identify and engage with potential partners.

One thing the paper underscored is the real value of collaboration: rather than shifting costs from one part of the healthcare industry to another (something we have been doing for years), true collaboration is designed to deliver value for all involved. And when it comes to lowering healthcare costs, it’s really the only option we have left.

You can download the paper here, for free. I’d love to hear what you think about some of the examples in the paper, or better yet, please share your experiences – good or bad- with trying to create more collaboration in healthcare. Can it really deliver the results healthcare needs, or is it just a nice idea?

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What Washington can learn from Chicago about healthcare reform

kconway@ghx.com — Fri, 07 Oct 2011 19:52:00 GMT

Something very special happened in Chicago this past week. A group of healthcare manufacturers and hospital executives came together and gave me hope, for the first time in a while, that we may actually find the answers to our current healthcare crisis through collaboration. And I got to thinking, “What if our lawmakers in Washington, who cannot seem to agree on anything including healthcare, could have listened to this conversation?”

What made today’s meeting so special is that when these two groups talk, it is usually about a topic on which they naturally disagree: price. Suppliers want to sell high, hospitals want to buy low. Instead, today, they focused on what they have in common and how they can help each other achieve their respective goals. Instead of complaining about supplier profit margins, the hospital executives around the table said repeatedly: I want my suppliers to make money; I want them to stay in business. At the same time, they called on the suppliers to help them keep their doors open in an era where the only real certainty is that they will be faced with lower reimbursements. (And remember, many of those hospitals are not making ends meet at current reimbursement levels.) Specifically, the providers asked the manufacturers to join them in building a single industry solution to solve many of the challenges that both parties face related to the sale, purchase and use of what are commonly referred to as physician preference items or PPI. PPI include items such as replacement hips and knees, spinal implants and cardiac stents, some of the most expensive and highly advanced products used in patient care today.

The hospital-supplier gathering occurred during the last two hours of an all-day meeting of an advisory board made up of 12 of the nation’s most prominent healthcare systems (representing several hundred hospitals) who are working with GHX to create just such a solution. The manufacturers were there to discuss developing a similar advisory board. Together, the members of the two advisory boards will participate in joint working groups with their provider counterparts to help ensure that the industry solution GHX builds delivers value to both providers and suppliers.

For those who question whether this level of industry collaboration is possible and can actually yield tangible results, I would offer that this week’s meeting is very reminiscent of the meetings held just over a decade ago when GHX was little more than a vision. Today, in the US alone, more than 70 percent of hospitals are using the GHX exchange to purchase the majority of their medical-surgical products, and transaction volume through the exchange continues to grow, more than 20 percent in the past year alone. By automating what were once highly manual processes (which is how PPI are handled today), those providers and suppliers are well on their way to achieving their goal of taking more than $5 billion out of the cost of healthcare in just five years’ time. When people and organizations come together and focus on their mutual objectives, not their differences, real transformative change is possible. Washington, are you listening?

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