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Pete Nelson

Vice President and General Manager, Global Alliances
Thursday, September 10, 2020

Demand-to-outcome analysis depends on quality supply chain data

In a procure-to-pay system, services depend on the availability of resources, and payment is based on the receipt of those resources. Data is used to answer the question, “Did we get what we paid for?” In a demand-to-outcome system, where resources are requisitioned based on need and paid for based on the results delivered, data must answer the question, “Did we get paid for the value we delivered?” It’s impossible to arrive at the answer without supply-chain data that is clean, comprehensive, up-to-date and unified

Value-based care is all about paying for outcomes. It’s evidence-based care, which means data about clinical outcomes must be understood in relation to data about the products, devices and supplies—i.e., the items—that are used to deliver that care. The integration of clinical data and supply chain data is what enables the demand-to-outcome analysis that informs value-based care. As we all know, the healthcare data universe is expanding. Machine learning. Artificial intelligence. IoT. APIs. Genomics. Wearables. The amount of data generated from these innovations is vast, and its quality will be central to your survival. Particularly as more hospitals are moving to cloud ERP systems, data integrity becomes more critical than ever before. Any cloud ERP system is only as good as the data that goes into it. The quality of your supply chain data is particularly important because, despite the term, it relates to much more than your supply network. In fact, it’s essential to a clear understanding of how your organization is performing as a whole. Supply chain data flows through practically every function in your business model. In a procure-to-pay delivery paradigm, the quality of your supply chain data can affect the efficiency of the entire enterprise; in a demand-to-outcome paradigm, it can determine its very viability. On the expense side, your item master is foundational. It’s connected to inventory, requisitions, purchase orders, receipts, invoices and payments. This is where information that comes from manufacturers, distributors, GPOs, regulatory bodies and other providers is collected and reconciled—before and/or after it flows through your MMIS/ERP system and any ancillary software tools and apps. But it’s also where things can break down due to errant, missing or incompatible data—resulting in unnecessary cost in the form of waste, rework, returns and exceptions. On the income side, where revenue is a function of patient billing, sound analysis depends on even more inputs: EHR data, procedure data, the charge master, contract data, reimbursement data and data about patient outcomes. In the era of value-based care, it’s easy to see how a clinically integrated supply chain is instrumental to financial health and one of the most valuable assets you can invest in.

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