In the olden days (think any time before 2010), the healthcare suppliers getting connected to the GHX exchange were pretty much medical-surgical manufacturers and distributors. And while the supplier community connected to GHX, and the provider community as well, continued to grow, the products that were being purchased electronically through GHX tended to be those we classify as disposables and consumables. Maybe it was just that healthcare needed a starting point to think about where and how to automate purchasing, and the area of a hospital most able to move toward e-procurement was the department formerly known as materials management.
The only way to fix what's broken in healthcare is through transformative change. Those hospitals and healthcare systems that have successfully cut costs and are generating greater revenue are the ones that have looked at the big picture, broken away from old practices and fundamentally changed the way they are doing business.
The resounding message I heard from the Advamed MedTech Conference in Chicago is that the MedTech industry needs to prepare for a transformative shift in how business is done in healthcare as we transition from a healthcare system that was traditionally focused on volume to a leaner, optimized healthcare system that focuses on value. Throughout the conference, the message was reinforced as industry leaders from manufacturers, distributors, payers and providers emphasized the need to transform the practice of medicine in America to focus on value.
By Ronda Wirth, Procurement Operations Manager, Supply Chain Management, Northern Arizona Healthcare
At Northern Arizona Healthcare (NAH), we believe paying any price for a product other than what has been negotiated with the supplier is a disservice to our customers. But doing so is easier said than done.
So, the first deadline for the U.S. FDA Unique Device Identification (UDI) rule is here, but to me, it's not as much about today, as it is about tomorrow, and the next day, and the next day, and so forth. That is not in any way a comment to diminish the significant effort undertaken by manufacturers whose Class III products need to be in compliance with the UDI rule today, but rather about the number of products that still need to comply with the rule and, even more importantly, how hospitals, healthcare systems and others will use the unique identifiers. For many their work is just beginning and has some surprising similarities to what providers must also do to prepare.
In healthcare, we all know the importance of tracking patients’ health. It’s what new technologies like EHRs enable the industry to do: access data so clinicians can make intelligent decisions and guide better behavior.
So why not do the same with your supply chain? Accessing data (albeit supply chain metrics rather than patient info!) makes your organization smarter and more agile. And given growing medical supply costs and shrinking reimbursements, getting visibility into where and how to cut expenses is imperative.
I’ve been thinking a lot about this topic lately, in light of last month’s achievement of our strategic goal to take $5 billion out of the cost of healthcare in 5 years and in anticipation of discussions about Lora Cecere’s new book- Metrics that Matter – and her firm’s Supply Chain Index at the Supply Chain Insights’ Global Summit being held this week in Phoenix. Check out her research on the Supply Chain Index for healthcare in this prior post. And watch for additional posts from the Global Summit this week.
Four and a half years ago when we set the ambitious goal to take $5 billion in cost out of healthcare in five years, we knew it wasn’t a given. A lot of work had to be done and we knew we couldn’t successfully accomplish this strategic goal without the GHX Global Network of supplier and provider customers. Well yesterday we did it! Our GHX "5 in 5" ticker that tracks our progress against the goal crossed beyond $5 billion.
Today, we are just one month away from the first official US FDA UDI deadline: September, 24, 2014. That's when manufacturers of Class III devices must be in compliance with the US FDA rule. Over the years, GHX has been providing assistance to manufacturers to prepare for and now comply with the rule, not to mention making recommendations to hospitals and healthcare systems that ultimately must use the unique identifiers to achieve the vision of UDI. Below, I have posted a link to many of those blog posts, videos and articles. You can also find more at www.ghx.com/udi.
I made my plane reservations yesterday for Supply Chain Insights’ 2nd annual Global Summit being held in Phoenix, September 10 and 11, and I hope to see some of you there as well. At last year’s event, Annette Pummell, RN, (then the chair of AHRMM, the supply chain organization for the American Hospital Association) and I had the pleasure to be on a panel with Vincent Pizziconi, Ph.D., a bioengineering professor at Arizona State University who works on 3-D printing in healthcare. Just imagine how the discussion of the healthcare supply chain changed when Professor Pizziconi literally pulled out a prototype 3-D printed hip from his pocket. As we continue to struggle with unique device identification (UDI) for medical products or automate the highly manual implantable device supply chain (both highly valuable initiatives that GHX and its network are actively involved in), we must remember to take a break from the immediate tasks at hand and “Imagine the Supply Chain of the Future,” which is the theme for this year’s Global Summit. After all, what would it mean to things like UDI and implantable devices if those replacements parts are made to order, using the patient’s own cells, at the facility where the surgery is performed.
What do healthcare and professional football have in common? Perhaps more than you might think. Denver Broncos Quarterback Peyton Manning shared his perspective when he spoke to the American Hospital Association (AHA) Leadership Summit in San Diego. As he put it, football and healthcare both operate in environments with “clear boundaries, strict rules, and almost zero margin for error,” although I am not so sure about the clear boundaries any more (more on that later, along with some other Manning insights). Where I really see the similarity is what you do when conditions change – you call an audible. That’s what Manning does, and the team responds. I would say it’s time not only to call an audible in healthcare, but to change the nature of the game. While there is certainly a lot of talk about healthcare needing to change, some of the other commentary at the AHA Summit indicated there is a lot more talk than action...at least not the kind of action that those who pay for a large percentage of healthcare – America’s employers – want to see.
At the 2014 GHX Healthcare Supply Chain Summit, representatives from four leading supplier organizations shared their lessons learned and best practices for using GHX Order IntelligenceSM to address purchase order (PO) issues during the transactional process—before the PO hits their enterprise resource planning (ERP) systems, thereby eliminating costly errors and rework. All presenters agreed that setting up a clearly defined set of business rules was key to improving order accuracy and process efficiency.
Talia Mauck, director of Supply Chain Management for Adventist HealthCare
So much of healthcare today is about centralization with organizations seeking to increase efficiency and reduce costs. At Adventist HealthCare we’ve found that decentralizing purchasing information by providing key clinical departments access to order status has enabled us to achieve these same benefits.
ince some supply chain progress has been made by many in healthcare, let’s consider how to continue advancing. From my research, my advice is start by following the logic trail (graphic below). The first step in the logic trail is to understand the supply chain maturity model and your organization’s current level. Questions to be answered during analysis include: What does the model imply for healthcare? Where does it apply for my sector? How can it be used without disturbing current improvement efforts? The intention, of course, is to use the model to augment existing efforts and approach optimized conditions.
I had the pleasure during GHX’s recent Supply Chain Summit to participate in one of the conference’s most heavily-attended sessions: a four-way conversation among manufacturers, distributors, GPOs, and providers about what needs to be done to better align pricing in the healthcare supply chain. Joining me in the session were some industry heavyweights: Del Jackson, Vice President of Contract Operations with Premier; Debra Gelman, Vice President of Channel Operations with Care Fusion; Dena Jackson, Director of Supply Chain with Anne Arundel Medical Center; and Steve Inacker, President of Hospital Sales & Services with Cardinal Health, along with Jan McCue, Vice President, Corporate Accounts from GHX.
At the recent GHX 2014 Supply Chain Summit, I sat in the audience and listened to CEO Bruce Johnson and others describe the many challenges inherent in our healthcare system. Consumers will say the cost of care is too high. Economists will say the rapid rate at which the cost of delivering care is increasing is unsustainable. And healthcare business leaders will say that we must act fast to reduce costs while increasing quality and safety for successful outcomes. Johnson described this situation as the rebalancing of the cost/quality equation, and called healthcare leaders at the Summit to collaborate to help drive elimination of redundancy, variability and waste in our system.
At the recent GHX 2014 Supply Chain Summit, I sat in the audience and listened to CEO Bruce Johnson and others describe the many challenges inherent in our healthcare system. Consumers will say the cost of care is too high. Economists will say the rapid rate at which the cost of delivering care is increasing is unsustainable. And healthcare business leaders will say that we must act fast to reduce costs while increasing quality and safety for successful outcomes.
It’s opening day for the 2014 GHX Healthcare Supply Chain Summit, but hundreds of providers, suppliers, government officials, standards bodies and supporting business partners have already been actively engaged in Philadelphia sharing insights on topics ranging from applying supply chain best practices from other industries to healthcare, developing more relevant metrics to measure supply chain performance in a value-based system, and how to achieve value, not just cost and regulatory burden, from the adoption of unique device identification (UDI).
In my role at GHX, I spend a great deal of time thinking about our customers and prospects, and how to help them get the most out of the solutions GHX provides.
Wherever I go, everyone I meet seems to have the same goal: they intend to move their organization to be “best in class.” They are excited about the solutions GHX is bringing to the industry and understand the benefits they will realize. However, they are often too busy to engage resources on projects. So what I hear them saying is moving to ”best in class” must wait.
From a supply chain perspective, the pharmaceuticals and med-surg markets have a lot in common. Products are ordered, fulfilled, shipped, billed, paid for and used in much the same way. At GHX, we’re interested in determining if pharma can benefit from the supply chain automation advances that have driven so much savings in the med–surg market in recent years.
In healthcare, we have a history of complexity that drives some of the current costs of healthcare. Bringing a new, innovative device or drug to market is an incredibly long, complex and costly process. Now add onto that our incredibly complex supply chain processes, which require the distribution of goods and services across a variety of points of care.
Winter has been tough this year. It has been especially tough on customer service departments.
Folks may not know see the linkages clearly yet, but the supply chain connection to cost, quality and outcomes is all around….at the HIMSS 14 Conference in Orlando, within the halls of the FDA and the Office of the National Coordinator for Health IT (ONC), even in the Wall Street Journal.
I arrived yesterday in Orlando for the HIMSS14 Annual Conference and Exhibition, and I am more optimistic than ever that there is growing recognition for the role the supply chain can play in improving meaningful use of electronic health records. It started last month, when I was at the Office of the National Coordinator for Health IT (ONC) and met the new national coordinator, Karen DeSalvo, MD. I was part of a delegation from AHRMM (the supply chain organization for the American Hospital Association) there to discuss how we can help increase adoption and use of unique device identifiers (UDIs) in healthcare delivery organizations. While only a few days on the job, Dr. DeSalvo seemed genuinely interested in the possibilities.
Did you catch the interview with John Glaser in Healthcare IT News Day this past Monday? The former Partners HealthCare CIO and now CEO of the Health Services Business Unit of Siemens Healthcare shared his thoughts on what it will take for Health IT – think electronic health records (EHRs) and meaningful use – to achieve what we all want, better healthcare. John certainly understands the landscape; in fact, he has had a hand in shaping much of it, whether in his day jobs, as president of the HIMSS board, his involvement in countless industry initiatives, or – and this is the toughest task of all – trying to get Congress to understand what it will really take to make technology work together to achieve our common mission.
I get to talk with a lot of people around the industry and based on these conversations, I want to share five goals you might consider to help you – and your company – drive transformational, end-to-end change across the healthcare supply chain: