Next-generation supply chain hurdles may self-destruct in five seconds

As Millennials step into the contemporary healthcare supply chain world, they are leading the charge to add high-octane, high-tech, information-driven horsepower into standard operations.

And it likely won’t involve what critics have called since the dawn of the Internet Age “transmitting dirty data faster…at light speed.” Instead, they appear to be okay with automation, computers and machines taking charge of a growing number of tasks or enhancing human ability to do more and think more. This leaves these emerging supply chain pros and leaders to strategize, concentrate on clinical and administrative customer service and render obsolete many of the pesky problems that plagued standard and traditional supply chains of the 20th Century.

What’s on the docket and monopolizing professional minds? Healthcare Purchasing News identified nine and asked forward-thinking supplier executives for their impressions and insights on what “pops out” to them.

Artificial intelligence (AI) the new labor?

Karim Babay, CEO & Founder, HealthSapiens

Mickey Meehan, Vice President, Products & Marketing, Medpricer

AI is already being deployed widely across healthcare systems and in the coming years, we’ll see the pace increase. We’ll shift forward from today’s reports and reporting tools — being used and interpreted by humans — to AI-driven decisions based on a wide range of information. Data from multiple systems will be aggregated, compared, learned from, driving new levels of machine-made decisions.

Jeff Lawrence, Vice President, Business Development, Inventory Optimization Solutions (IOS)

Steve Downey, Group Senior Vice President, Supply Chain Operations, Vizient Inc.

AI will overhaul the healthcare supply chain in the next few years. There is still an incredible amount of skepticism over AI, which is justified, as researchers turn pilots into commercialized deployments of diagnostic tools and clinical decision support solutions. The success of AI in healthcare relies on users trust in data. Artificial intelligence holds a lot of promise to revolutionize the way healthcare providers and patients interact with the data, but we need to determine how to test these algorithms to validate the information. We need a rigorous vetting and screening process, so we know which tools we should take forward into clinical applications. AI ultimately will improve cost, quality, and outcomes but we must proceed with caution.

Lee Ann McWhorter, Strategic Alliances Director, First Databank

The most impactful technology is the intersection of artificial intelligence (AI) and the Internet of Things (IoT). This will have transformative effects on the healthcare supply chain as it matures. These other technologies are components, or specific tools to solve specific challenges, but I don’t think they will have a transformative effect on the way that hospitals care for their patients. AI and IoT have that potential.

The transformative element is the ability to use IoT to connect absolutely every sensor, monitor and device in a network. The inputs from all these devices become a vast river of data that flows into a giant repository to be acted upon by AI. One challenge is the velocity, volume and variation in the data flow. This needs to be normalized and stabilized to be further consumed. This information is flowing into a vast repository and is absolutely useless without AI looking at it. So AI becomes the driving force behind much of the transformation we see in the future.

I look at these hospital networks today, and the components are moving into place. Every patient-monitoring tool they’ve bought in the last five years is network-ready. Data that used to only get written down on patient records is starting to flow because we’re now set up to collect all kinds of clinical data points 24/7.

On the supply chain side of things, I think the AI requirements are actually much simpler. We’re taking what is essentially demand planning and elevating it to the level of much more intelligent overall inventory control. You’re managing costs as well as looking at the most effective outcomes from a quality and cost standpoint and integrating all that into your algorithm. But doing this is not that complicated and is dependent on the data.

Peter Brereton, President and CEO, TECSYS

Sean O’Neill, Executive Vice President, St. Onge Co.

Augmented reality (AR) a virtual database

We conceive a future where a clinical provider could use a hologram much like their personal assistant to locate and request equipment or materials. That AR personal assistant could be learning the patterns of each clinician to identify patterns of variability that impact the delivery of care and inform the supply chain of changes in behavior. This is tied into AI.

Tom Redding, Managing Director, Healthcare Services, St. Onge Co.

BABAY: Augmented reality stands to unlock a generation of tinkerers and explorers in the same way LEGO blocks inspired countless engineers, architects, designers and planners. No longer are we as a species limited to unconvincing simulations of virtual environments. Augmented reality with respect to healthcare is like the cherry on the proverbial sundae: It just makes what you’re dealing with look (and taste) a little better.

That said, AR seems poised in particular to assist with healthcare diagnoses, as well as unleash potential for a more streamlined interface for accessing and managing information while in the middle of, for instance, a complicated surgery (for example, real-time voice-controlled heads-up display).

DOWNEY: With AR shopping experiences coming soon, consumers will become familiar with the experience of walking through a virtual grocery store rather than buying from items on a webpage list. Items shift from plan-o-gram layouts to dynamic placement based on previous purchases and current selection. Prefer organic cereals? The cereal aisle is now all organic. Need a kid’s cereal to supplement your organic selection? Kid’s organics appear. It will take time for consumers to adopt, but once they do, other industries will follow. Laying out clinical supply areas through AR instead of by hand, replenishing from remote locations with visualization, designing nutrition delivery programs through AR all are possible.

MCWHORTER: We have already seen disruption at every level of the healthcare industry, from patient care to training and education. AR is becoming more mainstream with Microsoft Hololens and Magic Leap, and 5G will be a major driver of that movement. More and more AR apps are being developed, including those that focus on healthcare content and distribution.

BRERETON: AR has a role in supply chain, but I see it as evolutionary, not revolutionary. Currently, a warehouse employee can be dynamically guided by wearable technology. If we change to AR glasses while performing the same task, he/she is guided by a visual overlay to show where to go and what to pick. It’s going to speed up the work, but by how much? Maybe the person becomes 4 percent faster, indicating that AR has the capacity to incrementally improve operations.

Blockchain paves way to alignment

LAWRENCE: We’ll be able to share and authenticate data across a broad range of functions. Today people are thinking of blockchain in terms of patient care, and appropriately so, but consider the supply chain implications. If our current view of the “end game” is receiving big chunks of data from multiple sources, aggregating and understanding it, not only can supply chain tasks such as sourcing, procurement, contracting and point-of-care consumption take leaps ahead with blockchain, but imagine the implications for understanding cost, quality and outcomes. We can finally compile all the information needed for a clinically-aligned supply chain.

DOWNEY: The intersection of ordering and price in healthcare is a complicated endeavor. Manufacturers have to keep systems up to date with field-generated discounts, distributors have unique pricing structures and GPOs have theirs. In the midst of all of this, health care systems are making transactions. Because of the complexity, those three- or four-way matches are often wrong. Blockchain technologies could be used to create a single chain of price, and record the transactions done at those prices, to reduce the amount of errors. Many organizations have systems in pilot at the moment researching the feasibility of this, and it has real potential to streamline the procurement challenges in healthcare.

BABAY: Blockchain technology has tremendous applicability when it comes to creating trust in an otherwise untrusting (and untrustworthy) world. In fact, blockchain technology is the foundation of our own HealthSapiens 2.0 platform. Among other things, the Ethereum blockchain will enable us to track patient care outcomes and physician ratings, enable secure sharing of patient electronic medical record (EMR) data, and usher in a transparent, outcome-based healthcare platform that puts patients first. Long-term, we intend to utilize blockchain technology to bring honesty and integrity into the pharmaceutical manufacturing process as well, providing an immutable and auditable record tracing ingredients along the way, and ensuring all parties are playing by the rules. By creating an environment where good behavior is both incentivized and rewarded, we at HealthSapiens want to be instrumental in elevating people’s health, while minimizing inefficiencies and eliminating waste up and down the supply chain. And blockchain technology will be a large piece of the puzzle.

MCWHORTER: Blockchain creates incontrovertible and distributable data records that are shared peer-to-peer among database systems. One of the most significant advantages of blockchain is this idea that data are theoretically protected from data-breach threats. With the development of more efficient healthcare data interoperability, wearable IoT devices and integrated AI within medical examination systems, blockchain will become an important part of the way hospitals secure data.

BRERETON: Blockchain gets a lot of press, but it’s less this year than last year when the hype cycle seemed to peak. Blockchain can address certain issues such as drug traceability and proof of origin.

REDDING: In addition to the use for claims, billing research, medical records, micro payment and data security, the use of blockchain will enable a highly efficient procurement function for a health system through a shared ledger with their suppliers. One of the biggest challenges for health systems is their inability to have full visibility across the entire supply chain (manufacturer to patient use) to identify potential gaps in services and product availability.

3-D printing can add depth to knowledge

DOWNEY: The capabilities for in-hospital or in-supply-chain printing of medical components are available today. The future will be the adoption on a more broad scale, for custom-tailored components. Adoption is currently limited to the early thinkers. This will grow to broader use and simpler interfaces with more robust material selections.

BRERETON: 3-D printing will have some effect on implants, such as in remote areas where it’s difficult to get supplies. Printing a replacement hip in that scenario can certainly be helpful, particularly when paired with good demand planning that takes advantage of the streams of AI-interpreted data. This will mean the hospital can have adequate production time for the part and prevent delays in treatment.

MCWHORTER: 3-D-printed devices, such as surgical instruments and implants, offer treatment advantages for surgery centers and hospitals but also create liability risks if the device isn’t manufactured properly. This is an area that needs more risk assessment, tracking, training, documentation, informed consent and protections against risk.

BABAY: The ability to cost-effectively manufacture prototypes, one-off parts, artificial limbs and prosthetics will be a huge leap forward in — as well as outside of — the healthcare industry. By reducing the need for massive warehouses of generically built products waiting to be sold, on-demand 3-D printing will allow more efficient use and distribution of resources. Furthermore, increase in 3-D printing demand leads to more options and eventually better prices, which facilitates more rapid development and innovation. That’s great for everybody. Artificial intelligence will surely go hand-in-hand with 3-D printing, as the design capabilities of AI with the proper parameters enable stronger, more complex, and ultimately more efficient designs that we as humans couldn’t realistically reproduce on our own.

With HealthSapiens 2.0, we’re fostering an environment where knowledge and research can flourish. By connecting healthcare consumers with researchers and physicians in a way that incentivizes and rewards all parties, we believe we can help break down many existing barriers to the release and spread of knowledge both in- and outside of the 3-D printing realms. The level of precision offered by today-s 3-D printing solutions reduces turnaround time, errors and waste considerably over previous manufacturing methods. By streamlining the manufacturing cost of 3-D-printed skin and other body parts, in conjunction with AI + smart supply chain management, more and better life-saving technologies becomes both possible and also practical on a larger scale. That’s really exciting.

O’NEILL: In the ideal world, the hospital will be fitted in the basement with a bank of 3-D printers with varied materials. Patients will be body-scanned upon arrival and custom-fitted supplies, devices and human tissue/parts will be printed on demand. This will be a very efficient supply chain that will minimize logistics and inventory while meeting patient-specific customized needs. The technology will develop and evolve to this model.

Internet of Things (IoT)/Machine-to-machine (M2M) master planning

John Freund, CEO, Jump Technologies

LAWRENCE: We’re seeing more and more connected, smart devices everywhere — in our homes, in retail settings and absolutely in healthcare. In the coming years, what if we are able to “sense” products and supplies as they come into our organizations, know where they’re stored, whether or not they’ve been consumed or expired and if consumed, on what patient, when and eventually, what outcome results? The IoT/M2M changes everything we do today, eventually creating a holistic ecosystem where we can clearly “see” our entire organization — no matter how far out that system reaches. Geography is boundless, systems are seamlessly connected, and our business intelligence is redefined.

MCWHORTER: The need to eliminate waste in the supply chain is real. Organizations can leverage IoT technologies to enable cloud-based, system-wide inventory management with data analytics which connects products and processes with their actual cost. The healthcare supply chain is no longer just about manufacturing, distributing and transporting products from one place to another. To really evaluate the supply chain, it must be viewed holistically. And with all the M&A activity in 2018, this piece of the puzzle is crucial. Data that can be collected, aggregated, visualized and acted upon is what will change healthcare. We call this “actionable data,” and healthcare organizations will use the IoT’s connectivity and data-sharing capabilities to free the staff from inventory-related burdens, so they can focus on leveraging the data for priorities such as reducing cost and improving outcomes.

ALEXANDER-VAUGHN: Sharing of information between devices can be a powerful tool in supply chain activities and supporting the dissemination of products to the point of use. The basics of device health and status provide the ability to proactively address issues before they occur and can help by distributing demand when there is an issue or failure in one part of the network used to support those supply chain activities like dispense and restock.

BABAY: The wearables market has really taken off over the past few years. In fact, many of us know more people who own FitBits than who own running shoes. Gone are the days of handwriting calorie counts in a notebook every day. Now we have wearables to help us track our steps, monitor our vitals and more. In the not-too-distant future, a dietitian could assign a meal plan to a patient recovering from surgery, that patient’s fridge automatically orders groceries per a prescribed meal plan, a drone delivers the groceries which are then tracked and analyzed in real-time until they need to be re-ordered. A physician could access collected patient information, the grocery store could get instant real-time updates on orders, and grocery wholesalers could more-effectively plan purchases and distribution based on the increase of available data.

At HealthSapiens, we’re fostering an environment for healthcare consumers that incentivizes and rewards good behavior. More-specifically, we’re bribing people to take better care of themselves. Part of this includes setting and meeting health-related goals like “visit the doctor for an annual check-up,” “exercise for 30 minutes 5x/week,” and so-on. In our ecosystem, your wearable would monitor your pulse/movement/activity, and create a digital paper trail. Once validated, you would be credited tokens to use in our ecosystem for healthcare-related expenses. You can’t fix what you can’t track, and good decisions come from good data. IoT will be a huge part of making this all come together.

O’NEILL: We envision a future where clinical and wearable technologies will record directly into the patient’s record, creating a much better understanding of their health while eliminating the need to scribe notes (e.g., scales, thermometers, blood pressure, etc.). These technologies, like Amazon’s Dash button functionality, will also be configured to reorder supplies.

Mobile devices go personal

LAWRENCE: Mobile technology has been in place in provider organizations for years, but we’re not yet tapping the full potential. Let’s solve the problem of company-provided versus personal devices, and then let’s make our supply chain completely mobile. Until the time that product sensing throughout our supply chain becomes reality, mobile apps and devices are the best step we can take to understand what’s come into our organization, where it is today, and when we need to replace it.

FREUND: Mobile devices will become even more ubiquitous in hospitals due to the changing workforce demographic. Supply chain professionals and clinicians who are now entering the job market expect access to iOS or Android devices on the job, and 75 percent of hospitals are looking at implementing a mobile strategy today, according to Apple. Therefore, having supply chain related point-of-use technology that is mobile-compatible is essential if we want to bring in new, young talent. Regardless of workforce demographics, mobile technology is easier to use across locations, it makes the standardization of training easier because it requires less customization, it’s easier to maintain, and the use of device management software improves data security.

Mobile phones and smartphone apps could hold the key to accurately matching medical records to the correct patient when records are shared between different healthcare organizations. Hospitals and healthcare providers could use information from patients’ mobile phones, such as their phone number, to confirm a patient’s identity much like your bank does today. A provider could match records with greater accuracy and streamline the check-in process by allowing patients to supply updated identity information through mobile device technology.

BRERETON: Mobile devices and technologies have stores of untapped information that can be valuable when added to the flow of other data being generated at the point of care. This could be in the form of images or even conversations among clinicians that should be captured for a patient’s record.

BABAY: More people own mobile devices than computers, and that trend doesn’t look to be slowing down any time soon. As such, mobile apps are lowering the barrier to entry for app users and app developers alike. Near-instantaneous communication with practically anybody, from across the room to the other side of the globe, is the norm. We’re all but an arm’s length and two thumbs away from each other in our ever-connected digital world.

At HealthSapiens, our current 1.0 platform offers our members unlimited monthly access to licensed, board-certified doctors in all 50 states, 24 hours a day, 7 days a week — and this service is available to anyone with phone access or an internet connection. Our member portal is accessible by mobile device or computer, and also allows patients to video chat with physicians. Looking forward, our HealthSapiens 2.0 platform will help to bring convenient healthcare solutions to a wider audience. Mobile technology, along with an ever-expanding availability of WiFi access, means people in remote villages and small towns will have access to healthcare where they otherwise may have not. Telemedicine-based healthcare reduces/eliminates travel time and helps more people get — and stay — healthy, and is a great middle ground for those without convenient access to traditional in-person healthcare.

REDDING: Autonomous mobile robots will become more than the “supply and waste cart movers.” They will be used to support clinical teams. With this capability and flexibility, there could be one robot per staff member in the near future.

The use for autonomous mobile robots will continue to expand as technology becomes more accepted by patients and clinical teams. The vision for the supply chain is to predict needs and use automated technology to deliver materials with minimal involvement/interaction. The long-term vision is that AI predicts an order is needed. The order is automatically generated in the ERP. A robot “wakes up” and picks the order. The order is then staged by the robot for pick-up. As the robot is taking the order to the staging location another robot arrives and picks up the materials to transport to the destination. The robot arrives and goes into the storage location to restock the inventory and then returns to home base.

Robotics/“Co”botics offer assistance

ALEXANDER-VAUGHN: Robotics will continue to be useful in areas like pharmacy supply chain and other functions where warehouse type picking or delivering activities take place. I believe there are opportunities beyond that, but the healthcare community will have to determine where those functions are and how to mix the technology in an industry that is highly dependent upon human interaction and nuance to effectively serve patients’ needs.

LAWRENCE: We’re seeing more “co”botics in healthcare — the combination of humans working together with a robot/machine performing connected tasks. Pharmacy is filled with these examples. What if we could leverage more cobotics in supply chain? We’re heading this direction in large organization warehouses and central supply locations, but what if we could take it beyond only the biggest organizations or largest storage locations, and combine automated technology with the tasks our line-level supply chain staff members perform? We could not only have a more efficient system, but also better, more accurate data.

BABAY: Quantum leaps in computing abilities and a string of impressive technological advancements has made it possible for a surgeon to complete a complex surgery without being in the same ZIP code, let alone in the same room, as their patient. Machine learning and further advancements in robotics hints at a not-too-distant future where robotic surgery is not only “an option,” but feasibly “the best option,” We foresee a future where physicians and robots work together to achieve outcomes greater than humans alone could achieve.

Our blockchain-based HealthSapiens 2.0 ecosystem is designed to foster innovation and make it easier for the secure sharing of knowledge among researchers, physicians, patients and authorized third parties. By combining AI/machine learning with surgical data, efficiencies and patterns can more-easily be uncovered, and programmed into constantly-evolving surgery algorithms. Healthcare data can be updated and accessed in real-time, giving physicians, surgeons, and their robot colleagues access to an unprecedented level of insight.

DOWNEY: The application of robotics is one of proper selection for the right use. Supply chains need to be dynamic, managing a very broad SKU base at rapidly changing volumes. Too much automation can be limiting, forcing a process into the scope of the robotics rather than the robotics at the scope of the process. As the evolving technologies of flexible robotic delivery systems begin partnering with supply chain leaders to find the appropriate but not systemic use of robotics, we will see use be at the right level to drive out costs. In clinical care, there are great potential applications in programs such as patient assist. Lifting or moving patients can be difficult for clinical staff; robotics has great potential to provide mechanical assistance at point of care.

FREUND: If you are doing self-distribution and you have your own warehouse — or if this is a goal for your organization — robotics will play a big part in your future supply chain. For example, robotic picking systems can be implemented to pull supplies on as-needed basis, allowing staff time to be reallocated.

MCWHORTER: Robot-assisted technology brings so many benefits for both patients and surgeons. It allows for precise and real-time movement of the instruments to reduce variation. It can also give a surgeon an unparalleled view of the area under surgery. Robotics offers multiple advantages such as reduction of post-operative pain, shortened hospital stays, earlier patient mobility and faster recovery times. And with the latest wave of innovation, robotics has made its way into the supply chain. UCSF Health teamed up with Aethon to use its autonomous mobile TUG robots. These new-generation robots allow UCSF Health to distribute items easily (Mullan). They also leverage TUGS for their soiled linen pickup.

BRERETON: Robotics are in the same category as AR because they eliminate the non-value-added, repetitive tasks that allow humans to perform jobs where they can add value through strategy and decision-making.

REDDING: We envision a future where the collaborative robots could work with the clinical and support service teams to increase productivity, enhance the work environment and improve reliability. These devices could be used to help with ergonomic lifting and moving or simply to structure the activity to comply with a “best practice” sequence.

Virtual reality not just make-believe

BABAY: One of the best things about conducting a virtual surgery is the ability to repeat pre-defined circumstances without risking the health or well-being of a real human being. This facilitates rapid skill development, increases muscle memory, and ultimately, means surgeons can be more-prepared to conduct technical surgery on patients with greater accuracy when they finally do step up to the operating table.

At HealthSapiens, our current 1.0 platform offers the ability for physicians and patients to interact via secure video chat. That’s great. Patients and doctors love it. But technology has come a long way in just a few years. Long-term, we at HealthSapiens foresee virtual reality playing a part in healthcare diagnoses. Instead of two-dimensional X-Rays and static images for reference, healthcare providers will be able to more-effectively analyze sample data, learn from similar experiences and procedures, preview organs and body systems in virtual space, and more. As the old cliché goes, “practice makes perfect.” We believe perfect practice produces perfect performance — and VR helps tremendously in shortening the overall learning curve.

MCWHORTER: In 2014, a UK doctor performed the first cancer surgery broadcast in virtual reality (Freedom and Safety). About 13,000 medical students tuned in to gain experience from this professional. VR will, no doubt, improve medical education worldwide thus improving outcomes. And medical students are not the only ones benefiting from VR. This technology can significantly improve the patient experience. Cedars-Sinai Medical Center, one of the earliest adopters of virtual reality, gives some stats to support this idea. According to a 2017 study, 50 patients who received VR therapy reported a 24 percent drop in pain scores. And the other 50 patients, who watched a calming two-dimensional standard video, achieved only a 13 percent pain decrease. That means VR is an outcomes tool and a cost-cutting tool by not relying on drugs or devices. VR is making great strides in managing stress for patients and holds the potential for more success in other healthcare improvement areas.

Adopting Amazon rules

LAWRENCE: Our technology shift to cloud-based software applications is driving unparalleled transparency, which is exactly what customers want. For example, check out the number of surgery centers posting pricing for the most common surgical procedures. This feels revolutionary to me. Today’s patient says, “if I’m the one paying, I should have the power/information to make my own decisions.”

It’s probably this same feeling that’s allowed Amazon to be so successful and why their approach will have a significant impact on healthcare purchasing moving forward. What’s working?

• Let me shop all available products (not just the ones my primary supplier sells)
• Let me see pictures of all the products I want to buy
• Show me reviews of what other people just like me think about this product. I’ve seen recent studies that revealed 86 percent of buying decisions are made based on reviews. We’re comfortable with that.
• And please don’t tell me about list price, cost mark-up, contract versus non-contract. Just show me your best price, Mr./Ms. Supplier, and I’ll make the decision. Let’s get rid of that dance where you tell me a cost, I say I won’t pay that much because you always add an extra 20 percent margin that I have to carve away.
• Identify Prime Select to help make it easier for me to make that final decision. I like to see the combination of pricing and customer reviews in the same place. And if I’ve missed some important consideration in product selection, tell me. The more I tell you about me, the more you can help me make good decisions.
• I’m always interested in what other organizations just like me are paying for this product. Organizations sell market price comparison services. But if the price is the price on the website, then I don’t need to worry about what others are paying because I see it.
• Let me do my business on a mobile phone, because I’m used to shopping for everything on my phone!

The healthcare supply chain participants shouldn’t focus all of their energy on fighting against Amazon and trying to convince customers that Amazon will never make it, “healthcare is different,” “they’ll never figure out GPO pricing,” “there’s too much regulation,” — you know the drill.  We should be focused on learning from them, and more specifically, learning why customers like what Amazon has to offer. I’ve read for years about Jeff Bezos’ “relentless customer focus.” Isn’t that what we should be paying attention to?

Now I’ve been careful not to say Amazon will be the only winner, but their model will win. We should all be adapting to the new reality of shopping for product in the work environment. Across the industry, people have been talking about Amazon having biggest impact on healthcare over the next several years. It’s time we look at models that are working and new ways to deliver high quality, cost effective healthcare.