2012 FALL P2P. Peer-to-Peer Learning Exchange Research Report. Supply Chain s Role in the Patient Experience. Sponsored by

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1 2012 FALL P2P Peer-to-Peer Learning Exchange Research Report Supply Chain s Role in the Patient Experience Sponsored by

2 Introduction The healthcare industry continues to be shaped by the shifting waters of regulatory and industry changes, much of which is turning the focus to the patient experience. The need to improve patient care and safety is one that cuts across all departments and has the potential to yield both direct and indirect financial rewards to the healthcare organization through improved patient outcome. How does the supply chain react to this growing focus on improving the patient experience? Are supply chain executives in position to give priority to patient preference in the decision- making process or does price dominate? The answer may lie in a more thorough understanding of what practices are emerging that bring about improvements in the patient experience while also bolstering cost efficiencies of supply chain operations. Identifying and adopting such initiatives provides the foundation for the supply chain s role in the emerging patient- centric healthcare environment. Impacts of Healthcare Reform Supplies are the second largest cost after labor in the healthcare industry. It is not surprising that price has long been one of the most prominent drivers of healthcare supply chain decisions. But with a growing trend toward more focus on the patient, there appears to be some indication that the patient experience could be a stronger influencer on purchase decisions than in the past. Jay Kirkpatrick, CEO, MidAmerica Region, HealthTrust Purchasing Group, says that while Healthcare Reform may play a role in putting more focus on the patient, the impact can primarily be traced to changes in coverage. Provisions of Healthcare Reform are also serving as incentive to make hospitals part of a whole continuum of care, something very likely to result in more emphasis on wellness, which also impacts the overall patient experience. Supply Chain Response to Patient- Centric Care So just how much influence does the patient experience have on healthcare supply chain decision making? While healthcare organizations may be implementing processes across departments to improve patient care, the ability in turn for While healthcare organizations may be implementing processes across departments to improve patient care, the ability in turn for patients to have direct influence on supply chain decisions is less clear. patients to have direct influence on supply chain decisions is less clear. Obviously, we re not in the business of purchasing poor quality products that hurt people, Kirkpatrick says, At the same time, I m not sure that when it comes to some of these high- tech products, there is a

3 strong patient influence. Most of those decisions are still driven in large part by physicians and the relationships they have with suppliers. Kirkpatrick says in reality, he s not entirely convinced that there are vast differences among products or the quality of outcome they are able to deliver, so it could actually be difficult to differentiate among them based primarily on the patient experience. Unless patients are somehow impacted financially, they are not likely to exert much direct influence over supply chain decisions. Influence of Direct- to- Patient Marketing In pharmacy, there is more direct- to- patient marketing designed to bring the consumer to the decision making table, but this remains less true for the medical device industry. However, this, too, has started to change. Medical device manufacturers have begun using celebrities and other well- known spokespersons to endorse specific products by brand name. Patients who need a procedure involving a medical device but who don t yet have a surgeon, might visit a medical device company s website after being exposed to direct- to- patient advertising and find a listing of surgeons in their area that use the advertised device. But Kirkpatrick believes it is only in these instances, by a type of referral network, that suppliers have had any success in driving volumes toward physicians and thus, set the stage for patient influence over supply chain decisions. Beyond these situations, he says, price still plays a much larger role than other factors, including patient influence. In the May 2009 issue of Materials Management in Health Care, Kirkpatrick noted that the six aims for improvement outlined by the Institute of Medicine in its report, Crossing the Quality Chasm: A New Health System for the 21 st Century, can be adapted by supply chain professionals to promote quality of the patient experience and drive department operations. Supply chain professional play a major role in the safety of their patients, their families, their caregivers and those whose work supports the patient care mission. Jay Kirkpatrick, CEO, MidAmerica Region, HealthTrust Purchasing Group Contributing to Areas of Improvement These six areas of improvement include providing patient care that is safe, timely, effective, efficient, equitable and patient- focused. Supply chain operations can play a significant part in achieving several of these objectives. Supply chain professionals play a major role in the safety of their patients, their families, their caregivers and those whose work supports the patient care mission, Kirkpatrick notes. As an example, it is a responsibility of the supply chain department to ensure that proper protocols are followed in order to ensure that products are properly and securely stored. Although effectiveness of healthcare may seem an area best addressed by those with direct patient contact and decision- making responsibilities for care delivery, Kirkpatrick believes that here, too, there is a role for the supply chain professional if in no other way than to adopt a

4 process conducive for efficient and effective care delivery. A supply chain professional s role is to provide services to facilitate effective health care delivery in the proper environment, Kirkpatrick explains. Likewise, supply chain management has a role in improving the area of efficiency, which should be addressed by all areas of the healthcare industry. Developing competency requirements for each position is one way to reduce waste. Just as with other departments, administrative costs can be reduced by doing away with duplicative paperwork, redundant processes and multiple re- entries of the same data. In addressing the sixth area of focus, keeping care patient- focused, the supply chain professional s role is to aid an organization in meeting the needs of individual patients. In work done by the Picker Institute and used in the 1996 AHA Eye on Patients report, several characteristics of patient- centered care were identified and still have applicability today. These areas include: respect for patients values, preference and expressed needs; coordination and integration of care; information, communication and education; physical comfort; emotional support; involvement of family and friends; and access. Supply chain professionals rarely engage directly with patients, but the supply chain affects the continuum of care afforded by caregivers, clinicians and physicians, Kirkpatrick reminds. Impact of Data Standards Proponents of data standards in healthcare point out that in the healthcare supply chain, where thousands of product transactions take place, there remains no single data standard. This is unlike nearly every other industry s supply chain. Instead, healthcare operates with multiple organizations advancing competing standards. How does this impact the patient experience? In its 2012 report, Supply Chain Data Standards in Healthcare, analysts with Booz Allen Hamilton identify several potential outcomes that have an impact on the patient experience and may be impacted by a lack of data standards, including errors when ordering and shipping products, limited or inaccurate data capture on products used, difficulties tracking products in the event of a recall, higher costs passed along to the patient and negative impacts on patient care. Likewise, the report lists a number of benefits that data standards bring to healthcare, including impacts on patient safety and the patient experience. These include improved traceability throughout the supply chain, identification and removal of recalled and counterfeit products, reduced human error by enabling automatic data capture and removing any ambiguity when identifying products, and improved post- market surveillance through the standardization of product information and clinical attributes that can be compared and analyzed across databases.

5 The report identifies less direct outcomes of data standards that could still influence the patient experience if put into place. For example, a streamlined inventory management process reduces error and redundancies, and allows staff to spend less time obtaining and cleansing data and more time on the actual decision- making process. Adoption of GS1 standards in healthcare would allow all the industry to compare cost and outcomes data to determine if the cost of products is justified through better patient outcomes. Supply chain executives hear plenty of claims by suppliers that their latest product is the greatest ever in terms of improving patient care, notes Kirkpatrick. Yet, few such claims have been backed by patient outcome studies to justify what is often an increase of 10 to 20 percent in price over competitors. Such scenarios clearly contribute to the high cost of healthcare. But with standards in place, notes Kirkpatrick, supply chain decision makers will have the opportunity to analyze data of roughly 6,000 hospitals to determine which products truly do improve patient care. Conclusion Despite the need to meet financial targets, supply chain executives must also keep an eye on assuring a quality outcome. Yet, there are several aspects of care that contribute to that outcome outside of the supply chain decision- making process. The physician or surgeon, for example, has a primary role as does the care that the nursing staff provides. The quality of product is probably number three, Kirkpatrick says. While more emphasis is being placed on the patient experience, there remain other considerations as well that will continue to play a major role in supply chain decision- making. The marketplace has essentially said that care at any cost is not the answer. It s finding that right balance between quality and cost where at the end of the day, we are doing the right thing by the patient but also by the payer and by the institution that is providing the care, Kirkpatrick concludes. Questions for Discussion 1. Do you feel that the drive for improving the patient experience is playing a greater role in supply chain decisions than it was prior to Healthcare Reform? How does the need for improved cost efficiency impact the influence of better patient care? 2. How might a movement toward a continuum of care model impact a hospital s supply chain decision process? 3. Describe how your organization s supply chain decision- making could contribute to improving efficiency of care delivery. Identify ways in which the supply chain might influence effectiveness of patient care. 4. What influence might supply chain decision making have on patient safety? 5. What influence can supply chain executives have on the adoption of data standards? How might standards play a role in improving the patient experience?

6 Resources Institute of Medicine. March Crossing the Quality Chasm: A New Health System for the 21st Century. National Academy of Sciences. Gartner Research. June 29, GS1 Standards Gain Traction Toward Improving Healthcare and Life Science Supply Chains. Kirkpatrick, Jay. May "How the Supply Chain Can Help Ensure Quality Care." Materials Management in Health Care. Kirkpatrick, Jay. April Supply Chain s Influence on Quality of Patient Care. Materials Management in Health Care. Mike Zirkle, et al Supply Chain Data Standards in Healthcare. Booz Allen Hamilton. Rodgers, Dirk. February 22, "Supply Chain Data Synchronization and Patient Safety. Rx Trace.