Clinical Supply Documentation in the OR

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Clinical Supply

Documentation in the OR

What’s the Problem?

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An Area of Opportunity

Med Instrum. $16B Med Equip $13B Lab $5B Ophth $3B Drugs $44B Food Service $23B

Cardiac & Ortho Implantables Med-Surg Consumbables NA Healthcare Product Expenditures = $185B $40B $40B 2

• Automation has significantly increased visibility, accuracy and efficiency

~ 40% of total hospital supply spend

50-80% of total costs for some procedures

Sources: Datamonitor, hfm benchmarking tools for reducing costs of care April 2000

Highly Manual,

Duplicative and Disjointed

Highly Automated

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Many Players, Many Documents

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PPI Market Pain

PPI supply chain is $5B+ annual problem – industry must create new model in order to manage cost pressures of Healthcare Reform.

$- $500 $1,000 $1,500 $2,000 $2,500 $3,000 Provider Manufacturer $2,625 M $2,725 M

Sources: PNC Healthcare; GHX Quantitative Research Study (Aug 2010; n=136 & n=25)

Low-Value Sales Tasks

Loss & Expiration

Low Inventory Turns

Back-Office Labor Back-Office Labor

Low Inventory Turns

Revenue Leakage

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PPI Market Pain

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PPI supply chain is $5B+ annual problem – industry must create new model in order to manage cost pressures of Healthcare Reform.

$- $500 $1,000 $1,500 $2,000 $2,500 $3,000 Provider Manufacturer $2,625 M $2,725 M

Sources: PNC Healthcare; GHX Quantitative Research Study (Aug 2010; n=136 & n=25)

Low-Value Sales Tasks

Loss & Expiration

Low Inventory Turns

Back-Office Labor Back-Office Labor

Low Inventory Turns

Revenue Leakage

Loss & Expiration

Automation , data and

process standardization

and interoperability are

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Provider Pain Points

• Lack of data re: role products play in lowering costs, increasing value • Revenue leakage and difficulty

tracking recalls due to inability to accurately document usage

• Nursing time spent on non-clinical activities

• Duplicative processes and

inconsistent data due to lack of system integration/interoperatbility • Difficulty ensuring contract pricing

• Reimbursement cuts driving price pressure

• Need better data in order to focus on value/total cost of ownership • Extremely low inventory turns • Lack of demand signals

• Just in case inventory

• High cost consignment model • High cost to serve (SG&A)

Industry Pain Points

Redundant, inconsistent and highly customized processes cost both sides

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What do we need to fix the problem?

Technology

Clean, accurate, standardized data and systems that can use the data

System interoperability (EMR, ERP/MMIS, Clinical Systems)

People

Greater understanding of what data is needed, for what and by whom

Reduced duplication of effort

Collaboration /mutual understanding of what it takes to reduce total costs of ownership and care delivery

Process

Standardized and Coordinated Processes

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Why Focus on Implantables

“60% of my O/R spend is on

consignment products and I have zero

visibility into what I’m spending”

- VP, Supply Chain

“We closely track our $500,000 in

hospital supplies, but I have a closet

with over $3M in consignment

inventory that I am not tracking at all”

- Director, Materials Mgmt

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Complexity: An Industry-wide Problem

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Bottom Line: Key is removing costs and inefficiencies across

the supply chain, not shifting them

ORIS Billing EMR AP ERP Order Log • 7 handoffs • 6+ IT systems • 3 Item masters • 4X manual audits MMIS/POU

Complexity/Variation

is the enemy of quality

and drives up costs

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Complexity around PPI a Critical Challenge

Q. What are the challenges to your existing healthcare supply chain model? Please select all that apply.

Q. LIST CHOICES MENTIONED IN Q13: Of the challenges you just selected, which one is the most significant? Please select one.

Source: Gartner AMR Supply Chain, Healthcare Providers

62% 53% 50% 42% 40% 40% 38% 37% 20% 20% 8% 13% 12% 7% 13% 5% Rising Cost of Supplies Complexity of product and information flow Ability to drive rationalization of physician product preferences Lack of leadership vision, maturity and control in the

SC Lack of Consistent Service in Supply Limited Best Practice Sharing Lack of SC partnership and visibility with specialty areas (OR, Cath, IR, EP,

Radiology)

Contract Process with Suppliers

All Challenges

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The Cost Quality Equation

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Hospitals and providers

will be reimbursed on

value, not volume.

Under healthcare reform, healthcare providers

will need to report on value delivered

COST + QUALITY = VALUE

What role do products play in lowering total

cost, while improving quality?

Can a more expensive product reduce

hospital acquired infections or readmissions?

BOTTOM LINE: We cannot know

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The CFO’s View

BOTTOM LINE: Accurate data capture on supplies used at

the point of care is critical to accurate charge capture.

What HFMA members have to say:

“In our fully electronic system, when there is a problem with charge capture, the clinician did not pick or document something correctly.” “When the charge is not driven by a clinical documentation event, there are charges not being captured.”

“We are not fully electronic, so there are errors in picking the wrong item off the charge master and thus the wrong patient charges are

captured.”

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Supply Documentation in the OR Still Highly Manual

13 224 166 37 2 2 5 Manually- paper Manually- keyboard Barcode

RFID scanned into app

RFID scanned- cabinet

Even with electronic implant recording capability, most nurses use paper and stickers for recording usage during procedure

Only 10% of entry is based on barcodes or RFID

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Paper Still Predominantly Used for Implant Logs

One-third of OR nurses still rely on paper implant log as primary source; Less than two-thirds use combination of electronic and paper implant log

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Who enters the Implant Info in the Implant Log?

15 52 28 224 21 39 0 50 100 150 200 250 Materials Mgmt staff OR Ordering Mgr Clinical Staff Entry Clerk Other

Nurse legally responsible for implant log

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Who Records Usage for

Payment & Restocking Purposes?

109 1 1 4 1 1 2 10 1 1 8 3 9 0 50 100 150 Mat Mgmt staff Mat Mgmt staff & OR … Mat Mgmt, OR Ordering Mgr, … Mat Mgmt & Clinical Staff Mat Mgmt, Clinical Staff, & … Mat Mgmt & Supply Rep

Mat Mgmt & Other OR Ordering Mgr OR Ordering Mgr & Clinical … OR Ordering Mgr & Suply Rep Clinical Staff

Supply Rep Other

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Who Records Usage for Patient Billing ?

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Healthcare: An Expensive Customer to Serve

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Pharma

Biotech

Generic

Medical

Device

Segment Mean

33%

Segment Mean

29.8%

Segment

Mean

23.9%

Segment

Mean

32.7%

Three-Year Weighted SG&A Expense As a % of Revenue

SG&A costs much higher in healthcare than other industries

Gartner Cross-Industry Supply Chain Top 25

(CP, High Tech,, A&D, Auto, Life Sciences, Industrial)

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Desire for Hub-based Solutions

19 0% 10% 20% 30% 40% 50% 60%

Highly Likely Likely Don't Know Unlikely Highly Unlkely

POU Solution Inventory Tracking

Strong support for

industry-wide model

vs. one-to-one

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Value of UDI and the GUDID

UDI provides global visibility and supports:

• Medical device recalls

• Adverse event reporting

• Tracking and tracing

• Supply chain security

• Anti-counterfeiting/diversion

• Disaster/terror preparation

• Shortages/substitutions

• Reduction of medical errors (e.g., bedside scanning)

• An easily accessible source of device information for

patients and clinicians

UDI Central to the FDA’s preliminary report “Strengthening our National System for Medical Device Postmarket Surveillance”

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Leveraging UDI for Better Value

• Documenting device use in patient’s EHR/PHR*

• Patient Safety/Quality Care Implications

• Revision surgery, e.g., which hip implanted

• Emergency cases, e.g., when patient en route

• Notification of patient allergies

• Quality measures and reimbursement**

• Recall Management

• Did you buy it, did you use it and on whom

• Comparative effectiveness and safety research

• Ability to link with larger data sets,

e.g., national and international registries

• Supply chain efficiency

* FDA and ONC discussing requiring UDIs as part of Stage 3 of meaningful use

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Leveraging UDI for Post Market Research

Unique Device Identifier Demonstration Project

• Develop an end-to-end (purchase to point of consumption) UDI tracking system • Utilize electronic health records and clinical registries to assess the safety and

effectiveness of medical devices after they have reached the marketplace • Stents first, then ICDs

International Consortium of Orthopedic Registries • Classification and harmonization with UDI

• Identify and capture clinical attributes that impact performance

• Demonstration projects: bearing surface, femoral head size, fixed vs. mobile knees, pediatric joints

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Mercy, Mayo, Kaiser Intermountain, Geisinger

Device Manufacturers

Provide GTIN, UDI & attribute data and labeling Facilitate/negotiate GTIN,

UDI, and attribute adoption

Item Master ACC, SCA&I Define additional clinically relevant attributes

ERP EHR Cath Lab

Data submitted to CathPCI registry ACC NCDR Enterprise Data Warehouse Data Marts Real-time Messaging Hub Comparative Effectiveness Research Post-market Device Surveillance

Business and Clinical Processes/Systems

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 Integrate UDIs into EHR  Link EHR with ERP and

clinical software

 Create data sets for analysis and sharing with FDA and partnering health systems  Link to national registries

 Link with other health systems

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Measuring Value

Master Data Management Easier to develop and maintain cross walks

between data held in multiple systems; source of truth for product data

Contracting, Ordering, Invoicing,

Spend Analysis Simpler means of identifying devices, reduced reconciliation time, especially for UOM; attributes enable “like” product identification Receiving Scanning made possible, guaranteed unique;

no relabeling required

Inventory Management UOM conversions; aggregation of GTINs

available in FDA UDID; product expiration can be better managed; Better understanding of demand

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Maximizing Value

To Achieve Return from Required Investment,

Manufacturers need to view as a strategy, not a project

Consider Objectives, Benefits, Impacts: Why are you doing this?

Regulatory compliance

Customer demand/service

Supply Chain Efficiency

Other

Who needs to be involved?

Who, what is impacted?

Providers need to leverage UDI for multiple purposes

What applications will be required (EMRs, claims, quality measures)?

What other non mandatory applications deliver value?

Who needs to be involved?

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Key Takeaways

Impacts and risks to both clinical AND financial

performance, patient safety and regulatory compliance

Shared industry issue –

Requires industry collaboration

Hospitals

• Supply chain, clinicians, finance

Suppliers

• Supply chain ops and vendor reps

Technology providers

• ERP, EMR,ORIS, PACS, POU

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A Coordinated Effort

We’re all in this together –

Figure

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References

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