Getting to the point of point of use

As healthcare organizations yearn for universal device, equipment and process interoperability, Supply Chain and Surgical Services aim to implement this seemingly lofty goal in several ways.

By enacting service and supply data standards, recording product usage per patient and procedure, and linking product consumption and clinical procedure performance to the patient’s electronic health/medical record, Supply Chain and the OR close the loop by connecting all of this to accounting and billing downstream on one side and to manufacturers for replenishment upstream on the other side.

The efforts resemble the feats of the Union and Central Pacific Railroads joining their eastward and westward rails, respectively at Promontory Summit, Utah in 1869. The groundbreaking golden spike signified the successful completion of the nation’s first Transcontinental Railroad in a similar way to Supply Chain and Surgical Services seeking golden opportunities by streamlining transactional decisions throughout the product and procedural channels.

In short, both Supply Chain and the OR want to know where products are at any location within their facility and at any time. For the OR, that desired knowledge may start at the patient’s bedside via bar-coded wrist band, for example, and migrate to sterile field of the OR suite; for Supply Chain, that desired knowledge prefaces product arrival at the loading docks and extends through patient discharge.

From ordering to production to shipping to storage to consumption to billing to reimbursement to restarting the chain via information technology, how confident can Supply Chain and Surgical Services professionals be that this scenario is truly achievable — even on a universal perspective?

Getting there from here

One way to ponder the notion is to start with the desired end game and work backwards to gauge applicability.

To achieve such a scenario requires a blend of process and technology, according to Ric Esarey, CMRP, Senior Consultant, Vizient Advisory Solutions-Supply Chain Operations, Irving, TX.

Esarey notes that he would consolidate software systems and interfaces, ultimately simplifying interfaces and standardization of equipment to provide better visibility to data, enabling increased supply service levels and a “just-in-time approach to supply planning. Furthermore, he envisions a materials resource planning process helping to reduce inventory levels and premium freight costs, obsolescence and expired product issues and the need for “the expensive practice of consignment inventory.” Another benefit involves clean and complete data, scrubbed and transferred automatically to the primary clinical systems, he added.

“For tracking purposes we would need to build and maintain a number of perpetual inventories in the organization and transfer the items,” Esarey said. The path extends from receipt into the facility to Supply Chain’s inventory system, linking the items and all related information to a specific bin location. Pick lists for case carts would need to indicate specific products to be pulled by item lot and serial number. In a similar fashion, any product pulled from the core would need to be scanned to the case file, he noted.

“When a case is closed, I would have an interface to the EMR to download the products and devices used in that case specific to the patient for capture in the medical record, billing system, implant registry and/or any research databases related to clinical outcomes over time,” Esarey said. “Since we are also integrating the normal item master information, including price, unit-of-measure, charge Code, HCPCS, HIBCC, etc., the transfer of information would be ‘automagically’ uploaded. This would reduce data entry time by clinical staff along with increasing data accuracy.”

Pursing the source of truth

Esarey likened the item master as the source of truth for all information related to products for all integrated systems, including the EMR, to the supply chain database as the source of truth for device and application identifiers, such as the Unique Device Identifier (UDI) for all stakeholder systems.

“The supply chain is uniquely positioned to facilitate the effort to comply with product data requirements,” Esarey added. “But first, we need to reach out to our clinical and finance functions to make sure we identify, define and understand all the healthcare organization’s data requirements along with how the data needs to be used.”

Patients must accept all of this amid privacy concerns, emphasized Shaun Clinton, CMRP, Senior Vice President, Supply Chain Management, Texas Health Resources, Arlington, TX.

“In a perfect world, tracking would occur across the dimensions of cost, revenue and ongoing patient care and follow-up,” Clinton told HPN. “From a supply chain perspective that would mean that it would be possible for a list of scheduled cases, and the physician performing them, to be transmitted to a party that would then be able to translate that and distribute the needed products and services to the OR suite. I would like to think that we would be able to begin sourcing and contracting around the acute episode of care at this point. This would involve extraordinarily tight coordination among all the parties, but it would hopefully begin to get us much closer to a true variable cost per procedure without allocations.”

In practice, the patient would have to accept the capabilities of an implantable, for example, to track activity and perform certain self-diagnostics, according to Clinton.

“We see this occurring more and more in the cardiovascular space, but I would be interested in seeing if this could be accomplished with total joint replacement implants as well,” he said. “For example, if we know that early ambulation is critical in the recovery process, it would follow suit that if an implant could detect and measure this — think of a Fitbit-type device — and report activity, this could aid in the monitoring and follow-up needed for this population.”

Stormy Thomas, Clinical Services Supply Manager, Texas Health Resources, argues that single point-of-use tracking essentially would plug patient data systems and procurement systems into the IT framework.

“We have interfaces that link those two systems together, but imagine having a single application that is readily available to link items immediately back to a usage created for case costing,” Thomas said. “Creating a mobile app that could be used remotely, following a patient from check-in to discharge would be ideal. An RFID or bar-code system could track single use items, drugs and implants straight from the manufacturers and would tie the serial number, lot and expiration directly to a single patient within a specific case. This allows for better management of recalls, billing and tracking.”

The efficiency gains would be a watershed, Thomas continued. “Having this information going directly back into the procurement system where our usages are housed would allow for a reduction in manual input of data,” she indicated. “This would eliminate errors or lack of information being documented and also allow for better time management on the purchasing and receiving side as it would tie items as they are used to the ordering process.” Thomas oversees Supply Chain contracts for the 13 joint venture ambulatory surgery centers in the Dallas-Fort Worth area that are managed by Surgical Care Affiliates.

To achieve such operational nirvana requires suppliers and providers to standardize bar-code identifiers across the country, according to Steve Pohlman, Senior Director, Materials Management, Cleveland (OH) Clinic. Pohlman cites the pharmaceutical industry’s use of the National Drug Code (NDC) system for its products.

Properly identified items then could populate a virtual item master that all healthcare organizations could access, Pohlman indicated, and the VIM would serve as the source of truth for specific attributes, such as price and unit of measure, among others.

“With industry standard bar codes, this would make it much more efficient at the point of use,” Pohlman noted. “Every item used in the health system could be bar coded at the point of use. The point of use system would interface with billing, inventory management systems, EMR, etc. From a replenishment standpoint, that usage information would flow back through the ERP system and automatically reorder the items once a reorder point is met. Supply orders would be placed based on current demand. In addition, collecting the real-time usage data by case or type of procedure will lend itself to predictive analytics. These analytics will create to opportunity for more accurate budgeting and standardization of items used by type of procedure. This data could also be shared with the suppliers to allow them to be proactive with production schedules or distribution channel optimization.”

Reality bytes

Perspectives differ on the proximity of achieving virtually seamless and transparent data transmission from the point of use throughout the entire system. Some say suppliers and providers are on the cusp of leaping to the next level; others say the industry already has enough to proceed and succeed.

“Supply chain leaders have a fundamental responsibility to address the issue of tracking and tracing product information, and chain of custody regardless of resources,” Vizient’s Esarey insisted. “The good news is the technology exists, as demonstrated in any retail store that manages inventory and sales, to automate data capture for each transaction in the supply chain continuum.

Device and implant manufacturers already provide the requisite tracking information per FDA-UDI requirements, Esarey contends, noting that hospitals need to get into the game.

“I don’t yet see hospital supply chains scanning and capturing the UDI label information into their Materials Management Information System (MMIS),” he said. “We could move to RFID tags to track the UDI, which would allow supply chain professionals to track the RFID tag wherever located within their facilities.

“My concern is that supply chain leaders are not taking the lead to own the product/supply data and information and leaving a gap that has to be filled,” Esarey continued. “Our clinical and financial colleagues have responsibility to fill that gap, and in the process, may be creating redundant systems/processes. Rather than proactively team with them to meet their needs we typically focus on our productivity and financial efficiencies that do not consider the organization’s cumulative efficiencies. What then happens is the clinical and financial staff, out of necessity, develops a process to include the UDI information on patient bills going forward. The EMR software people may also be selling enhanced options to scan the information from the product labels because we in the supply chain are not meeting our internal customer’s requirements.”

Because the Centers for Medicare and Medicaid Services (CMS) is requiring healthcare organizations to include UDI information on bills effective Jan. 1, 2018, hospitals need to develop and deploy processes and systems to ensure proper reimbursement, Esarey urged.

“Supply chain leaders must begin to take ownership for product planning and data going forward. A big part of the challenge is to partner with our clinical and financial people and begin to understand their issues and requirements,” he added.

“Most providers are getting far more sophisticated in understanding the costs associated with an episode of care as well as along the costs associated with the entire continuum,” Texas Health’s Clinton said. “But this requires a great deal of coordination. It is imperative that we make sure there are no holes that are not being captured. The challenge will be to bring parties to the same negotiating table that may compete in certain areas but are capable of producing a true end-to-end solution for a finite amount of funds.”

Despite the existence of technology that “tracks all manner of things,” self-tracking capabilities incorporated within devices may not be ready for widespread prime-time yet and may only occur in pockets, according to Clinton. “I do think that it become important that we make ‘maintenance’ technology as cutting edge as some of the implant technology that currently exists,” he added. “Again, it is a continuum that determines success and high-quality outcomes.”

Cleveland Clinic, which earned HPN’s 2005 Supply Chain Department of the Year award, currently is implementing point-of-use bar code and RFID technology in the surgical and procedural suites to capture product attributes and usage data, according to Pohlman. The system interfaces with the EMR for the clinical staff and provides “complete visibility” to clinical inventory in the OR and nursing units, he said.

“This will allow us to better manage utilization, near-expired products, slow and no move items, etc.,” Pohlman continued. “The system will be managed by Supply Chain and the Inventory Management Center of Excellence with the goal to get clinical staff out of the supply business and working to the top of licensure. The next step in this process is to get the manufacturers to standardize the types of bar codes that are used and to develop a virtual item master that can be used by all health systems. If this is not accomplished, it will not slow us down, but it would be a wonderful enhancement to the system we are implementing.”

Cardinal’s Endicott referenced a five-year-old McKinsey & Co. study (“Strength in unity: The promise of global standards in healthcare,” October 2012) to reinforce how data standards can fuel progress if only agreement could be reached by all participants.

“Global standards could enable substantial patient safety benefits and total healthcare cost reduction of $40 billion-$100 billion, suggesting there is an urgent need to find new scenarios,” she said. “However, like the example of the two railroads meeting in Utah in 1869, we have to agree on the gauge of the tracks. For example, unlike the pharmaceutical supply chain that has settled on NDC, or the retail supply chain that has settled on UPC, the medical device supply chain is still hurting for lack of universal standards for the purpose of managing inventory. We have the trains to move information, but we need imperatives to connect the tracks.”

When products don’t sport tracking mechanisms, such as bar codes or RFID tags, or those tracking mechanisms don’t comply with GS1 or HIBCC standards, process efficiencies cannot be achieved, according to Endicott.

“Ultimately, UDI ensures that each product is properly labeled,” she added. “The most important factor is ensuring product is labeled with a readable bar code or RFID tag that includes the necessary product information.”