Supply Chain Data Standards in Healthcare

Transcription

1 Supply Chain Data Standards in Healthcare by Michael Zirkle Ryan Gallagher Seth Rogier

2 Table of Contents Making Healthcare Safer and More Efficient With Supply Chain Data Standards...1 Health Standards Landscape...1 What Supply Chain Data Standards Look Like...2 Benefits to the Healthcare Industry...2 Turning Health Supply Chain Data Standards Into a Reality...3 Conclusion...3 Booz Allen Can Help You Be Ready for What s Next...4 References...4 About the Authors...5 About Booz Allen...6 Principal Offices...7

3 Supply Chain Data Standards in Healthcare For many healthcare organizations, the lack of a widely adopted supply chain data standard is causing inefficiencies and errors that are affecting both patient safety and the bottom line. Making Healthcare Safer and More Efficient With Supply Chain Data Standards Standards are a necessary component to efficiently communicate and exchange information. Common languages, such as English or French, enable people to talk to one another, and other types of standards are needed for computers and systems to exchange information. However, without standards, whether in language or technology, conversations must be translated, data must be converted, and the opportunity for error increases. This is certainly the case in the healthcare supply chain, where hundreds of thousands of different products are bought and sold, yet there is no single standard for the data identifying them. Instead, the industry is hampered by multiple organizations with competing standards. Although supply chain partners are exchanging data more than ever, they are still struggling with the lack of widely adopted data standards, resulting in: Data and transaction inefficiencies Errors when ordering and shipping products Limited or inaccurate data capture on products used Difficulties tracking products in the event of a recall Costly overhead to build and maintain proprietary item masters or data sets Negative impacts on patient care To overcome these problems, healthcare organizations need to collectively strive for quality, accurate, and interoperable data that can be shared among supply chain partners using a common language, or standard. Health Standards Landscape Health standards are not new, and the standards landscape is becoming increasingly active as information technology (IT) makes rapid data sharing easier. Although the industry has several welldocumented and generally accepted standards for medical terminology, classifications, observations, data transmission, and claims, there is no equivalently accepted standard for identifying medical products within the supply chain. Existing product identification data standards promoted by groups, such as GS1 and the Health Industry Business Communication Council (HIBCC), are common; however, none have the industry-wide acceptance and adoption needed to foster seamless interoperability among supply chain partners. Too often, medical product manufacturers, distributors, and providers have their own unique way of identifying products supported by proprietary identification numbers, barcodes, and siloed IT systems. When one considers the volume of transactions, value of products being moved, and the implications of medical device identification errors, it becomes evident that a problem that appears to be specific to the supply chain is actually a much larger issue that affects the entire healthcare industry. Health Standards Beyond supply chain and identification data standards, such as GS1, HIBCC, and ISBT 128, there are many other standards in healthcare. Current standards exist for messaging, such as Health Level 7 (HL7), vocabularies such as Systemized Nomenclature for Medicine (SNOMED), codes such as International Classification of Diseases (ICD), and observation identifiers such as Logical Observations, Identifiers, Names, and Codes (LOINC). 1

4 What Supply Chain Data Standards Look Like Physical identifiers such as barcodes and radio frequency identification (RFID) tags are used to store and transmit product data captured in various information systems, ranging from automated medical supply cabinets to inventory and financial systems. Currently, these identifiers are not standardized on medical products, leaving organizations with little other choice than to create their own proprietary item identification data sets and item master catalogs. Non-standard product identification data can lead to a host of problems, ranging from inefficient or failed transactions (such as purchase orders) to potentially harmful identification errors. Conversely, healthcare industry adoption of a data standard, exemplified by the grocery industry and the now ubiquitous Universal Product Code (UPC), would enable healthcare organizations to efficiently and safely identify products while they move through the supply chain (see Exhibit 1). Benefits to the Healthcare Industry The sheer number and complexity of health products requires a robust infrastructure to support product movement and information exchange; however, the efficiency and safety of this infrastructure is currently hindered by low-quality or inaccurate data. With the adoption of a common supply chain data standard, healthcare organizations can begin improving this infrastructure and realize value through: Patient Safety: Improved traceability throughout the supply chain to facilitate the identification and removal of recalled or counterfeit products Reduced human error by enabling automatic data capture and by reducing any ambiguity when identifying products Improved post-market surveillance through the standardization of product information and clinical attributes that can be compared and analyzed across databases Health Efficiencies: Reduced information administration and manual efforts associated with maintaining proprietary product identifiers within internal IT systems and on physical barcodes Exhibit 1 What Supply Chain Standards Look Like Non-standard Product Identification Data Manufacturer Provider ID: Provider ID: 789 Manufacturer ID: 123 Standard Product Identification Data Distributor ID: 123 Manufacturer Provider ID: 123 Distributor ID: 123 stributor D: 456 Distributor ID: 456 Translation Translation Transaction Transaction Currently, non-standardized medical product identification information causes confusion, errors, and waste throughout the supply chain because many organizations use their own proprietary data to identify products while translating information provided by others. Source: Booz Allen Hamilton A standard identifier used among supply chain partners (such as the UPC on grocery products) could help the healthcare industry streamline operations, enhance product traceability, and ultimately promote patient safety by reducing identification errors. 2

5 Streamlined inventory management by reducing process errors and redundancies and providing a foundation for organizations, functions, and systems to share information Increased visibility into the supply chain and improved decision support with consistent and accurate data that can be compared, aggregated, and analyzed Proactive staff who spend less time trying to obtain and cleanse data and more time analyzing information to make decisions Turning Health Supply Chain Data Standards Into a Reality Supply chain data standards can make healthcare safer and more efficient, but only if industry partners are willing to adopt them. A number of factors, including mounting economic pressures, pending federal and state regulation, and an industry push for proven standards, are converging to accelerate these cooperative efforts. As these factors develop, leading organizations are getting ahead of the curve by championing industrywide adoption of data standards and preparing their supply chains. To turn data standards into a reality, health organizations and supply chain leaders can advocate for standards through a few key activities: Engage Industry Trends. Organizations looking to adopt supply chain data standards should stay prepared by actively engaging in the industry and regulatory trends around them. Leading organizations and industry groups, such as Mayo Clinic, GS1 Healthcare US, and the Healthcare Transformation Group, regularly publish case studies and newsletters and hold standards-related events. In addition, pending regulations, including the Federal Drug Administration s Unique Device Identification 1 (UDI) and various state electronic pedigree requirements, will undoubtedly affect the way data is managed in the supply chain and should be monitored. Industry leaders in improving the healthcare value chain are the same early adopters of GS1 standards. Early adoption may become a competitive advantage in managing data across the value chain. 2 Gartner, June 2011 Raise Awareness. The health supply chain is composed of a wide array of stakeholders who may benefit from the adoption of standards. To raise awareness and encourage support, supply chain leaders should communicate the benefits of standards and establish cross-functional teams to ensure all aspects of the organization support and are prepared for standards adoption. Collaborate Across the Supply Chain. The benefits of data standards will accumulate as more organizations adopt them and supply chain partners can begin exchanging information seamlessly. To maximize these benefits, organizations should proactively work with their partners (e.g., vendors, group purchasing organizations (GPO), etc.) to raise external awareness and establish adoption goals. Prepare for Change. Understanding the technological, operational, and clinical implications of standards is critical for setting expectations, planning for change, and achieving successful execution. Conducting an assessment of these areas will help organizations define the scope of the effort and understand their level of preparedness. Conclusion As US healthcare expenditures continue to grow, reaching an estimated $6 trillion by 2020, 3 the need for an efficient and safe healthcare supply chain to help bend the growing healthcare cost curve is now greater than ever. To turn standards into a healthcare reality, now is the time for all healthcare stakeholders to follow the steps of leading organizations and begin preparing their supply chains for standards adoption. 3

6 Booz Allen Can Help You Be Ready for What s Next Booz Allen is a trusted partner of clients in the healthcare industry and is dedicated to tackling their toughest challenges and delivering results that endure. We deliver broad expertise in the full spectrum of health, supply chain, business, and technology to help clients take on the complex challenges of the 21st century. Booz Allen has a team of experts with a proven record of success in all aspects of healthcare consulting: Health Analysts providing subject matter experts and years of experience in health operations, systems, and architecture References 1. US Food and Drug Administration, DeviceRegulationandGuidance/ UniqueDeviceIdentification. 2. Gartner, GS1 Standards Gain Traction Toward Improving Healthcare and Life Science Supply Chains; June 29, Centers for Medicare & Medicaid Services, downloads/proj2010.pdf. Supply Chain Professionals offering experienced professionals in health sourcing, contracting, operations, and supply chain technologies Standards Experts providing broad perspective and expertise on the life cycle of standards and their integration across organizations, processes, and systems 4

7 About the Authors Mike Zirkle is a Principal at Booz Allen Hamilton and a member of the firm s Analytics professional staff. Focused on the civil market, Mr. Zirkle has nearly 20 years of experience with supply chain and operational improvement in both the public and private sectors. Seth Rogier is an Associate in at Allen and a member of the firm s Analytics professional staff. He has nearly 10 years of experience in supply chain and operations and maintains a focus in the health market. Ryan Gallagher is a Senior Associate at Booz Allen and a member of the firm s Analytics professional staff. He has more than 15 years of management consulting experience. Mr. Gallagher leads Booz Allen s Strategic Sourcing and Supply Chain Strategy offerings and is focused on the health market. Contact Information: Michael Zirkle Principal zirkle_michael@bah.com Ryan Gallagher Senior Associate gallagher_ryan_b@bah.com Seth Rogier Associate rogier_seth@bah.com

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