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Thursday, August 11, 2022

Eye-opening Facts Increase Urgency to Automate Bill-only Implant Orders

If we’re automating orders for gloves and gauze, why not implants?

Health systems have long had the ability to automate ordering of common medical/surgical supplies that are stored at the hospital and replenished as needed. This is done through the GHX Exchange, using purchase orders (POs), and then are billed through invoices.

But orders for implantable devices, such as artificial hip and knee components, have long been difficult for health systems to manage. This product category includes a very wide range of items, and they often come in as many shapes and sizes as patients do, greatly increasing the number of variations on a single item.

Known by various names but the challenge is the same

There are different terms used to describe implant orders in the procurement world sometimes referred to as bill-only or bill and replace. Some devices, especially ones used in the ER, are kept in limited inventory at the hospital and then replaced as they are used.

But usually, they are brought to the hospital on the day of the procedure by the manufacturer’s sales rep. In most cases, the manufacturer bills the hospital after the device has been used in a procedure, and the patient has walked out the door with it.

This is crazy – why are we still doing this?

Orders for implants are not regularly sent via electronic data interchange (EDI) through the Exchange. Instead, the manufacturer’s sales rep and the provider facility’s circulating nurse separately and manually document the products used in the case.

Currently, managing implant orders is a lengthy process that is time-consuming and error-prone for everyone involved, and it continues long after the procedure. It typically involves paper shuffling between clinical and supply chain teams (sticker sheet or PDF), and emails/phone calls – sometimes even faxes – between the provider and implant manufacturer to process the order, from PO generation through invoicing. 

“This is crazy,” said Michael Tabbert, Manager, Supply Chain, Froedtert Health, when describing their previously manual implant order process during his 2022 GHX Summit presentation.

“It was the piece of paper that was really driving me nuts,” commented Jack Koczela, Director of Supply Chain Services, Froedtert Health during the 2022 Summit Automating Bill-Only Implant Orders panel presentation. “It was watching this piece of paper move from person to person and fax machines and telephone-in orders and the confusion that would ensue that really drove us to want to make improvements.”

Manual procurement of implants results in:

  • Ordering errors and inaccuracies
  • Overburdened clinical staff
  • Off-contract spend
  • Inefficient order tracking through email
  • Pricing inconsistencies and inaccuracies
  • Longer payment cycles

Koczela questioned: “We can automate gauze and styrofoam cups and all that sort of stuff but why can't we automate really high-dollar implants?”

Automation can be done – so go do it

“We know by and large most of the industry still isn't fully automated on implant orders,” said Rammi Gill, Vice President, Managed Services and Customer Care, GHX, during the Automating Bill-Only Implant Orders panel presentation. “But recently we’ve actually had a lot of progress through a combination of technology and some services, along with increased priority.”

Koczela and Tabbert led the Froedtert Health supply chain team in tackling the challenge of implant orders, starting with one of the health system’s major implant suppliers, Johnson & Johnson (J&J). Through enabling technologies and collaboration with J&J and GHX, they increased their bill-only PO EDI rate by 14% and volume by 412% in just two months.

“I would say to all of you: This is possible. It can be done. So go do it,” said Koczela.

The benefits of automating implant orders

  • Reduce cost and save time by reducing the number of manual touches throughout the order cycle
  • Better patient care because the right implant is available
  • Contract compliance on expensive items
  • More accurate invoices
  • Better margins on revenue-generating procedures

Koczela and Tabbert’s advice to other health systems:

“Go talk to a supplier—pick one,” said Tabbert. “You work with them, then you bring one on board. Like we brought J&J on board, you bring Stryker, you bring Zimmer. Pick one. Let’s get some momentum behind this.”

If you missed it – catch it here

If you missed the 2022 GHX Summit Automating Bill-Only Implant Orders panel, featuring Koczela, along with supply chain leaders from Mount Sinai Health System and Stanford Health Care, you can register for on-demand access to the video here.