Item data: It’s not just for supply chain anymore

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For years, the prevailing opinion by high-performing organizations was to limit the product data held in item masters to a subset of products routinely used in the hospital environment (e.g., PAR stock and products held in inventory or on contract), as opposed to everything that might walk through the hospital doors. With the rapid expansion and use of electronic health records (EHRs), the item master is evolving to become a strategic asset utilized for much more than just supply chain processes. As the single source of truth for item information in multiple systems, this data is being leveraged to support supply documentation at the point of use and patient billing. With broader applications and dependencies come a new set of challenges for supply chain teams, starting with the breadth of the item master.

Collaborating for a better documentation process

To increase understanding of the problem, GHX recently analyzed the implant record for a large academic medical center. Over the course of a month, as products were being documented at the point of use, only 50 percent were found in the item master. For those that were not, the clinician is required to manually enter the product information, which is a labor intensive process. An estimated 20 percent of products used in a procedure were never identified, resulting in both missed charges and an incomplete clinical record, which poses a patient safety issue if there is a problem with any of the products. There is a case for expanding the item master in order to reduce the need for manual documentation by clinicians and improve charge capture, but a larger, more complex item master can make it difficult to control rogue spend or perform value analysis. Simply adding these products to the item master without putting additional controls in place can result in purchasing of potentially off-contract and non-preferred products. The question then is how to create a solution that can solve for both needs: seamless documentation and the ability to manage a formulary of products more closely.

Beyond the question of size, the data in the item master must be accurate and complete. The needs of clinical staff vary widely, and how they describe a product is often specific to their training, experience or service line. In other words, even among clinicians, there is rarely agreement on a perfect clinical description. One thing is for sure, the description used solely for supply chain will not satisfy their needs. Supply chain professionals and clinicians must come together to reach consensus on product information. Those that do it best rely on communication, collaboration and change management. Cross functional teams need to work together to create a nomenclature using standards and rules for descriptions. The difference between good and great revolves around change management. Even with the best collaborative approach, those that forget to address the downstream impacts of the change through education and information will be faced with endless challenges and push back from users.

Once is also never enough. An ongoing item master maintenance plan and process are critical, with contracts, price and other item information in a constant state of flux. With over 30 percent year-over-year churn in item and pricing data it is virtually impossible for any single organization to stay on top of all of the changes without dedicated resources. The role of supply chain staff in managing these changes with technology, people and data governance becomes paramount as the item master evolves to be the source of truth across the healthcare delivery organization.

Armed with accurate data throughout clinical and financial systems, organizations can derive actionable intelligence about the cost of care, a fundamental component to success (if not survival) in a value-based healthcare model. Organizations that figure out how to harness the power of data — those who truly understand what it costs to deliver care vs. relying on estimated or derived costs per case — can begin to engage in impactful conversations with clinical and physician leadership. This would improve the patient experience, advance the health management of populations, and reduce the cost per capita of care.

That’s nothing less than achieving the Triple Aim.

As the Executive Director, Industry Relations at GHX, Karen Conway works with industry associations, standards bodies, government agencies, analyst firms, academic institutions and the media to identify opportunities for hospitals and suppliers to optimize supply chain operations and improve business and clinical performance. Conway is chair-elect of the board of directors of AHRMM, the supply chain organization for the American Hospital Association. Conway is currently writing a book on the Accountable Healthcare Leader, drawing upon the concepts developed in her 2013 global leadership book, Leading from the Edge, which she co-authored with the former chief talent officer of Cisco.  Conway serves on the editorial board of Healthcare Purchasing News.