Value-based healthcare demands a new approach to item data management

Regulatory and market demands for more real world evidence (RWE) on product performance and changing reimbursement structures are necessitating changes in how providers have typically managed product item data. The drive for RWE on medical devices has been enabled by the U.S. Food and Drug Administration regulation requiring manufacturers to label their products with unique device identifiers (UDIs). It was further strengthened by regulations from the Office of the National Coordinator for Health IT (ONC) and the Center for Medicare and Medicaid Services (CMS) requiring electronic health records to hold UDIs for implantable devices in electronic health records (EHRs) and providers to share that data as part of the Common Clinical Data Set (CCDS). With data on products used in patient care in EHRs and subsequently registries, researchers can study how specific medical devices perform in routine clinical practice. Their research can assist providers in sourcing the best products for specific patient populations and more effectively managing recalls, while helping manufacturers design and market products based on real world performance.

Effectively capturing and managing data about products used in patient care can deliver a range of benefits for providers, from more complete charge capture to calculating costs for delivering care. Bill Mosser, vice president of supply chain services for Franciscan Missionaries of Our Lady Health System (FMOLHS), says hospitals and health systems have traditionally not been required to understand the true cost of an episode of care. They were simply paid based on the services performed. As a result, he says, they have not historically built systems to enable that capability.

That approach no longer works with advanced payment models, such as bundled payment where providers will be paid a target price lower than what CMS has historically paid. To manage toward a target price, hospitals and other providers involved in the episode of care need to understand not only their actual costs but also how variation impacts both cost and quality. Knowledge about what drives that variation, e.g., the patient, the physician, the products used, etc., can inform care pathway redesign. The process begins by collecting data at the individual patient level. As healthcare systems gather data across many patients and procedures, they can explore relationships between multiple factors, including but not limited to patient co-morbidities, physicians, facilities, products used, lengths of stay, complication and infection rates, readmissions, etc., all of which lay the groundwork for more advanced predictive and prescriptive analytics to further improve the cost and quality of care.

Supplies can make up a significant portion of the cost of some procedures, making data on products consumed critical to patient-level cost accounting. To ensure that its EHR has up-to-date and comprehensive data about all of the products used in patient care, FMOLHS chose to use a cloud-based or virtual industry item master as the source of the data as opposed to its on-premise ERP item master. To do otherwise would have required FMOLHS to increase the size of its ERP item master nearly five-fold. Instead, FMOLHS follows best practice and limits the products in its ERP item master to those most frequently purchased.