The Healthcare Hub

Value-based Healthcare Demands Better Accounting for Costs and Quality

posted by: Robert Lynch, Consultant North Americas, GHX
Thursday, October 25, 2018

Very few health systems know the true cost of a patient care procedure. Historically it is not something we have accurately captured as a healthcare industry. But as we move to value-based payment models, and seek to deliver higher quality care at a lower cost, we need to know the cost of care, including the cost of supplies used in a procedure.

A key reason why it is so hard to determine supply cost by procedure is clinicians simply can’t find products in the EHR when attempting to document their use on a patient. At Franciscan Missionaries of Our Lady Health System (FMOLHS), the item master was feeding product data to the clinical documentation systems. But because the item file contained only routinely used items, clinicians could only find the items they were looking for in the system about 40-50 percent of the time.

In observing clinicians documenting items at the point of use, the FMOLHS supply chain team found they would try two or three times to find an item in the system and then they would give up because they didn't want to take more time away from the patient being treated. As a result, FMOLHS was capturing approximately 40-50 percent of charges for every case and losing an estimated $3-5M in revenue annually.

I was a member of the FMOLHS supply chain team when the organization implemented its Epic electronic health record (EHR) system in 2017. We didn't want to face the same supply documentation challenges that we faced with our previous system. We decided that we had to find a way to take clinical staff out of supply chain operations, or at least keep their efforts to a minimum, while increasing product charge capture at the point of use. So we turned to our supply chain solutions provider GHX for help. 

We knew the item master wasn't going to cut it as a source of product information for the EHR. Working with GHX we determined that we also needed 12-18 months of purchase order (PO) history and contract data to get the full picture of our supply usage. We sent all of this information to the GHX team, and they entered it into the company’s Clinical ConneXion solution, which cleansed the data removing duplicates and enriched it with attributes required for clinical documentation and patient billing. From there Clinical ConneXion directly feeds the cleansed and enriched data directly to FMOLHS’ Epic EHR system. To make it even easier for clinicians to document supplies at the point of use, we implemented barcode scanning into the EHR.

Through these efforts, FMOLHS is documenting up to 95 percent of the cost of care. 

I am now a member of the GHX team but I had the opportunity to represent FMOLHS and share this story at the 2018 GHX Healthcare Supply Chain Summit. For more details on what FMOLHS has achieved as a team and after implementing Clinical ConneXion, read this case study.