The 2015 Canadian Industry Stakeholder Meeting (October, 2015 in Mississauga, ON) brought together over 150 participants from supplier, provider, GPO and distributor organizations to share experiences and learn from one another.
Meeting topics focused on contract management, price alignment and performance measurement. Throughout the day, presenters from both provider and supplier organizations shared the tools and processes they use to effectively track these core business functions. Following the presentations, participants broke into smaller groups for further discussion.
At GHX, like many of you, we’ve been engaged in weeks of strategic planning for 2016. The opportunities in front of us and for our customers are significant. But before I get to how I see 2016 evolving for the healthcare supply chain industry, I want to reflect on the past 12 months and the major themes, events and changes that moved the healthcare industry in 2015.
For the last few years, the team at GHX has made yearly predictions for the healthcare supply chain – often anticipating major trends, challenges and opportunities for the industry. And, most times, I’m proud to say we’ve been fairly accurate with those predictions! In 2016, we’re continuing that tradition with the release of our top five trends for the year
There are three things a market-driven healthcare manufacturer absolutely needs in order to be effective at driving product strategy and growth. It goes without saying that these organizations have such foundational elements as a clearly stated vision, mission and strategy, as well as a healthy corporate culture which embodies collaboration, communication and trust. Once those elements are established, in 2016, the big three are the technology tools, processes, and drumroll, data!
Next week, nominations open for the 2016 GHXcellence Awards. The expanded array of awards reflect the evolving nature of supply chain and the role it plays in improving both costs and quality in healthcare. GHX still honors the Best 50 hospitals and healthcare systems for the work they are doing to automate processes and reduce costly exceptions. The value of automation and accuracy remains foundational and should never be taken for granted. After all, that alone led to GHX and its customers documenting more than $5 billion in savings in less than five years. Today, we continue to document savings, but now we are able to also take into account the addition of more mature supply chain practices, including those recognized in the expanded awards program.
Each year, Supply & Demand Chain Executive announces the winners of its “Pros to Know Awards,” which recognize the industry’s top supply chain professionals. GHX has a long history of having its executives featured on this prestigious list — and this year is no different. Steve Cochran, CTO at GHX, was selected for the 2016 award for his role as the “brains” behind the GHX technology vision and roadmap.
Within many healthcare organizations, the supply chain department operates in a silo disengaged from frontline caregivers. In the case of McLeod Health, this led to $3.2 million a year in lost revenue as a result of not capturing product usage at the point of care. To address this issue, McLeod’s senior leadership assembled a multidisciplinary team comprising administration, clinical leaders, finance, information systems and procurement, to analyze supply chain processes, identify points of revenue leakage and put processes and systems in place to address them.
In a healthcare environment where everything has become digital, most medical-surgical product manufacturers have transitioned from manual data entry to electronic, automated processes for customer orders.
Are your customer service reps still physically keying in orders while your competitors and peers have put into place touch-less order processes? Do your customers consider your competitors and peers easier to do business with because their orders flow electronically via EDI? If so, consider this:
While most providers and suppliers spend countless hours hashing out issues around product price, few have examined an area that presents a greater area of savings for both parties – the actual total delivered cost of a product. This includes direct and indirect costs required on both sides of the supply chain to deliver the right product to the right place at the right time.
Most providers and suppliers recognize that Cost-to-Serve in healthcare is high but the day-to-day challenges in supply chain seem so overwhelming, they don’t know how to begin to address them. Here are four key steps from healthcare supply chain leaders to get you started.
The GDSN Major Release 3 updates GDSN to better meet today’s regulatory and digital requirements. Developments such as the FDA’s Unique Device Identification (UDI) rule and the European EU1169 mandate make it necessary for changes in GDSN. With the release roll out in May 2016, questions have been raised about how this impacts GHX and our clients. The news is good! You are covered as a Health ConneXion℠ subscriber – and this release is good for the healthcare community too.
The third deadline for the FDA UDI rule is fast approaching. With Class II medical devices making up the largest group of classified devices, there is likely to be a big surge in activity regarding data submission to the Global UDI Database (GUDID). But, before this step even begins, manufacturers should begin with a comprehensive approach to product master data management.
I’m waiting in the lounge at the Eurostar Terminal, heading home after two days at the MedTech Summit in Brussels, reflecting on all that I heard on the draft European Medical Device and In Vitro Diagnostics Regulation (MDR). The MDR is designed to bring greater scrutiny, traceability and transparency to medical devices and in-vitro diagnostic equipment used in Europe. It includes unique device identification language similar to what is currently being enacted in the United States. My colleague, Karen Conway, will provide a compare and contrast analysis of the two regulations later in another post in the Healthcare Hub.
Last week, my colleague in the UK, Ed Palferman, got a first glance at the text of the proposed Unique Device Identification (UDI) regulation for the European Union (EU). The language regarding UDIs for medical devices is contained in a larger document known as the Medical Device and In Vitro Diagnostics Regulation (MDR) document. The regulation is expected to be formally adopted by the end of the year, with compliance for the sections related to medical devices in 2020 and for in vitro diagnostic sectors two years later.
Since GHX was founded 16 years ago, we have always looked for ways to leverage provider and supplier connectivity and collaboration to take waste out of the healthcare supply chain. I’m pleased/happy to announce GHX’s acquisition of Hap-X, a healthcare focused payment network that shares that sensibility. Like GHX, Hap-X serves both providers and suppliers. They use the Hap-X platform to take costs out of the payment process and provide better visibility around payment reconciliation, while still allowing customers to decide with their trading partners what is the best payment mode based on specific business transactions. I like to think of it as “Automation with choice.” That’s also a concept that GHX has strived to provide since our founding in 2000.
Maintaining accreditation and compliance with HIPAA regulations is an on-going process for healthcare systems. In this post, Cheryl Watkins-Knowles, director of Purchasing for Palmetto Health, describes how their organization is using GHX Vendormate Credentialing and access management solutions to address their goals for accreditation, patient and staff safety, and mitigate financial risk.
The long term benefits of UDI implementation will be felt as adoption and integration into health care delivery increases. The FDA’s goals for UDI include improved patient safety, modernization of medical device post-market surveillance and the facilitation of medical device innovation.
Healthcare suppliers and providers that have collaborated on supply chain improvement initiatives have reaped the rewards of greater efficiency and lower costs – but it requires a level of trust nonexistent in many trading partner relationships.
“In the traditional buy/sell relationship, each party is trying to outwit the other,” said Gene Kirtser, President and CEO of Resource Optimization & Innovation (ROi), Mercy Health’s supply chain division. “But we are at a point in our industry where that is simply not sustainable. Providers and suppliers must learn to work together to find ways to reduce costs. That’s the only way we will all survive.”
Vendor representative credentialing has grown significantly in priority - and changed in scope over the last several years with increased regulatory requirements. As the importance for a process became more and more apparent, many healthcare supplier organizations developed programs based on the immediate need or circumstance, with some evolving over time.
Healthcare contracting is a highly complex, multi-step process and cutting costs in contracting is directly attributed to pricing alignment. The lack of pricing synchronization across supply chain constituents creates pricing errors that result in significant rework between providers and suppliers. In addition, suppliers and distributors require numerous back office personnel to support the highly complex rebate and chargeback process necessary to support group purchasing contracts.
Content is enabling provider and supplier organizations to make more strategic and effective business decisions in a rapidly changing market. Among the many forces driving change in healthcare are financial pressures, regulatory reform, systems change and standardization, and a surge in mergers and acquisitions.
We’ve seen that as manufacturers embark on the UDI process it is quickly realized that UDI is not once and done. Many manufacturers begin with a tactical approach, only to realize that taking a broader perspective will serve better. Define your strategy with the end state in mind.
An overarching theme behind creating a sustainable UDI strategy lies in taking a holistic approach. Manufacturers that develop a sustainable master data management strategy that meets current compliance requirements and customer needs, but also takes into account future requirements, will see the most return on investment from an operational efficiency and cost perspective.
Anyone who sells to healthcare systems is aware that visiting sales and service representatives must meet a specific set of credentialing requirements for hospital access. These requirements are driven by the need to meet standards for patient safety, controlling costs and limiting exposure to fines and sanctions. These credentials become complex when you realize each facility requires different documentation and each facility manages it a little differently.
Most healthcare industry challenges are not one sided. The challenges are felt by both providers and suppliers, paper invoicing being a good example. There are the tangible costs in postage, ink, time to receive mail, to open mail, remove exceptions and route for approval. Then there is the invoice mystery- did the customer receive the invoice and is it ready for payment?
As my friends know (and my poor husband must deal with), I am currently studying statistics in grad school. In the midst of the occasional (okay not always so occasional) challenge of a new theorem or mathematical formula, I have gained a new appreciation for the concept of uncertainty, which is what statistically significant research tries to reduce, while recognizing that it can never be completely eliminated.
Since 2013, Mount Sinai Health System has grown rapidly through M&A activity. As a result, we’ve had multiple hospitals with their own supply chain and accounts payable (AP) departments each using disparate technologies, including different enterprise resource planning (ERP) systems and item masters.
Healthcare manufacturers are asking the questions – Where do we go next? What’s happening in the market? Are there unidentified growth opportunities? The right data helps you answer those questions and evaluate sales performance in order to get ahead. We took a look at how one of our medical products manufacturing companies is using GHX Market Intelligence to fuel growth.
Following is a brief overview of how one medical products manufacturing company fueled market growth using GHX Market Intelligence
The deadline for Class II medical devices passed last month, and with Class III devices, all implantables regardless of class, and now Class II devices covered by the UDI regulation, more than 50 percent of devices sold in the United States should be labelled with unique device identifiers (UDI). However, a considerable number of manufacturers are still struggling to fully comply with the rule or create a sustainable process for ongoing compliance. Some may not have even begun the process. The final UDI ruling was published in September of 2013. With three years to prepare and several deadlines already passed, what is standing in the way of manufacturers? It turns out there is more than one reason many manufacturers haven’t completed their initial submissions to the FDA’s Global UDI Database (GUDID).
This past spring, many provider organizations received notice of a yet another regulatory compliance assessment as part of their HIPAA accountability checklist.
The Department of Health and Human Services, Office for Civil Rights (OCR) announced the start of the Phase 2 HIPAA Audit Program to ensure that “policies and procedures adopted by covered entities and their business associates meet selected standards and implementation specifications of the Privacy, Security, and Breach Notification Rules.” Indianapolis-based Eskenazi Health, one of the largest safety net health systems, was one of those organizations.
Healthcare providers need visibility into vendor contracts across the entire organization in order to drive contract compliance, consolidate vendor spend and reduce supply costs. At the heart of improving transparency and visibility is an effective contract management strategy. Without it, organizations lack the ability to obtain and access the data necessary to make smart purchasing decisions and maximize cost savings opportunities.
Protecting patient healthcare data is becoming a greater challenge for healthcare facilities as the industry transitions from manual to electronic information storage and sharing. The rising number of criminal attacks on hospital and healthcare system data and the sheer magnitude of individuals (over 30 million) affected by data breaches has resulted in greater regulatory pressure on healthcare organizations.
What are some of the biggest challenges that vendors face with credentialing?
When hospitals began creating credentialing programs they turned to their vendors, holding them accountable for meeting the new credentialing requirements. It turned out that many vendors were not prepared for the scope of this event. As companies endeavored to meet the variety of compliance requirements for each healthcare organization, the struggle to incorporate credentialing into everyday business practices came into the spotlight.
GHX participates in and attends many healthcare industry conferences each year in addition to hosting the annual Healthcare Supply Chain Summit. In the course of attending these conferences, we typically see common themes that run from event to event. It would come as no surprise that the current environment finds healthcare providers continuing to look for opportunities where costs can be reduced and programs can be operationalized while still contributing to the quality of patient care.
Healthcare mergers and acquisitions caught fire in 2015 and are predicted to continue the trend. As noted in the recent article Hospital M&A is Heating Up co-authored by myself and Mike Gillespie, global management consulting firm Accenture forecasts acquisitions of non-acute providers to reach 84 percent of total acquisition volume by 2018. The M&A activity is fueled by efforts to cut cost, increase quality and gain economies of scale needed to survive in a value-based reimbursement environment. However, these goals may be compromised when provider organizations aren’t preparing adequately for the integration of technology systems and data that will impact clinical, business and financial performance.