Healthcare spending in the U.S. is projected to increase to $4.5 trillion, 19.3 percent of the GDP, by 2019, according to the National Health Expenditure Accounts. With hospitals facing negative operative margins and increasing budget pressures, forward-thinking organizations are looking for new areas to streamline and automate – and many are turning to the implantable device supply chain.
A (complex and error-prone) day in the life
The implantable device market (knees, hips, cardiac stents, etc.) is responsible for upward of $40 billion in revenue, with an estimated $5 billion in losses per year due to major inefficiencies and lack of visibility into the supply chain. Healthcare providers and suppliers that want to get a handle on these losses are turning to technology and collaborative strategies to better manage these devices and create a culture and industry shift from the status quo.
The current “life of an implantable device,” from ordering through surgery, involves an extraordinary amount of human interaction. The initial step is scheduling the case, which primarily involves a phone call between the surgeon and hospital, then the surgeon and supplier to order the necessary devices. These conversations are typically not electronic, but rather phone calls. The hospital also communicates with the supplier’s sales representative to ensure that he or she brings the correct devices to the hospital for the case. Surprisingly, there is no standard way to track this communication, because it also takes place on the phone or in one-off emails.
This process is not entirely free of technology. Some suppliers have developed tools to track devices and cases, but a hospital would have to use a different tool for each supplier it works with, which would quickly become burdensome and confusing. Hospitals also use their own internal systems to schedule cases, which can be one of many different flavors of health information systems, depending on the facility.
It’s a common misconception that if a hospital is using an electronic health record (EHR) system, it will also help to track implants. This is incorrect. While EHR systems are helpful for scheduling and clinical documentation, most do not include a supply chain process – meaning that they do not have robust ties into supply chain systems and, as a result, this perpetuates the disconnect between the clinical and supply chain functions. EHRs simply do not work with supplier systems to ensure that the right device gets to the right place at the right time. That responsibility falls again to humans – typically in the form of a few phone calls and reminder emails.
Once the sales representative brings in the device for the case to the hospital, more manual steps are taken as the OR staff pulls the product to go onto the case cart, tracks the items used and enters the item identification numbers into an internal system to create a purchase order.
As in any industry, manual processes bring the possibility for human error – and the subsequent waste resulting from those errors. The too-common results are bloated inventories and inefficient ordering. In attempts to limit human error as much as possible, some providers and suppliers are looking for technology they can adopt to streamline the current processes.
The dawn of the implantable device supply chain
In order to automate the implantable device supply chain, it’s critical that suppliers and providers collaborate – something that is still a relatively new concept in the healthcare space. This collaboration must also include sharing elements of information about the devices throughout their lifecycles.
To avoid the burden caused by using one-off solutions, some healthcare trading partners are currently testing an industry-wide solution, starting with enabling electronic data interchanges for orders, including the data lot, serial numbers and expiration dates. The next step involves point-of-use supply consumption capture and case management (instead of the OR staff manually tracking devices). When the case is scheduled by the hospital, the supplier will receive an automatic electronic notification so it can collaborate on preparing products. Further collaboration and data exchange will eventually allow providers and suppliers to analyze trends and analytics, furthering inventory optimization and eliminating additional waste.
Once the technology is in place to allow these data exchanges, the goal is to reduce unnecessary cost and error on both the supplier and provider side. Optimizing the implantable device supply chain will only be a success if both providers and suppliers see the benefits.
About the author
Suzanne Alexander-Vaughn is director, product management, GHX. For more about GHX, go to www.ghx.com.
