Future of the healthcare supply chain

By Admin
Follow @SamJermy and @SupplyChainD on Twitter.Every year, for as long as Ive been in healthcare, and that is now approaching 25 years, the industry take...

Follow @SamJermy and @SupplyChainD on Twitter.



Every year, for as long as I’ve been in healthcare, and that is now approaching 25 years, the industry takes stock of where it’s at and where we anticipate we’ll be in the New Year. The challenge in the healthcare supply chain, is that much of what was trending as far back as 2010 when the Affordable Care Act was passed into law, is still trending in 2015. The years preceding and those that followed have had a deliberate focus; process efficiency resulting in cost savings and improved quality of care.


In 2015, a primary focus should be on data. That’s the key to unlocking the supply chain challenges facing the industry.


The supply chain trends we’ve seen over the past couple years will continue including provider and supplier consolidation, patient care moving outside the acute care setting, reduced reimbursement levels, implementation of and integration with electronic health records (EHRs) and other healthcare business systems.


At the core of these trends is a need for quality data so that leaders can make informed, quality decisions. By quality data I mean accurate data for sourcing and procurement along with normalisation of data for reporting and predictive analytics.


As healthcare continues to focus on a cost-to-serve strategy for managing healthcare cost, accurate data is a foundation block for understanding procedure costs and its relationship to desired clinical outcomes. Built on that is system interoperability. Once data is normalised, the ability to share data across many hospital systems and their internal technology support systems begins to be the norm rather than the exception. Healthcare providers must be able to understand the relationship between clinical and supply chain data.


The fact that today there is a lack of uniformity in standardised data impedes healthcare’s ability to react faster to an ever-changing ideal future state. At the highest level, providers need better information on procedure cost so they are better equipped to know the complete cost to deliver quality patient outcomes.


In 2014, providers and suppliers started to see a catalyst for standardised product data. That said it is not easy for organisations to obtain the data in a manner that can be easily integrated into its various systems, from the enterprise resource planning (ERP) and materials management information system (MMIS), to EHRs, billing systems, and product registries for clinical research.

UDI is simply a starting point for us as an industry, but certainly an important one.  Clearly, the next step is to incorporate these standards into legacy systems and operating models.


With the healthcare industry also concentrated on quality patient outcomes, the use of data will move us even closer to the patient to drive quality care. Specifically, hospitals and other healthcare organisations will be exploring ways to get technology (i.e., sensors, scanners) closer to the delivery of care (i.e., triage, ORs, recovery) to capture real-time data and compare it against large quantities of existing data to make better decisions to improve patient outcomes.


From a technology perspective, the industry is embarking on a time of ‘sensing and understanding’ in healthcare. Hospitals and other organisations will be looking to capture data closer to the patient, closer to ‘the action,’ and analyse that data to make smarter, faster, better decisions that result in predictive demand signals, quality patient care and positive outcomes.


So what are some of the things that supply chain leaders should consider in 2015?


First, they need to look at the data they are already responsible for and establish a process in order to both manage the data effectively but also ensure that the data is as accurate as possible. Part of that process is assessing the tools they’ll need in place to manage the data and get it clean. That’s not a one-time event, but rather an ongoing process of maintaining the integrity of the data.


Many supply chain teams are already capturing product data that is subsequently used for a variety of purposes (e.g. inventory management, analytics, etc.).  They can use this knowledge and experience to help their organisations access the necessary data for important objectives, such as efficient patient cost-to-serve with the desired clinical outcome for quality patient care.  As more emphasis is placed on criteria around EHR meaningful use, healthcare providers will need to understand the long-term impact for adherence to the criteria. Again, accurate and normalised data delivers the necessary visibility.


Next, they need to define a data automation strategy. What best-in-class hospitals are working on is a data automation strategy for creating “the perfect order,” a touchless scenario that automates the entire process from purchase to invoice to payment.


The final step is using the data to prioritise where they can have the biggest impact on process efficiency resulting in cost savings and improved quality of care. That’s actionable data and that’s the trend that needs to dominate the 2015 supply chain.


By Bruce Johnson, CEO and President, GHX 


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