Synchronization

By Paula DeJohn

Materials managers eager to join the movement toward efficiency and accuracy through standard data formats will find a tool kit awaiting them at the upcoming AHRMM conference. It outlines methods for converting hospital computer systems and logistics procedures to the same type of electronic supply chain processing that retail companies have been using for several decades. It is designed to remove some of the fear factor that materials managers face when beginning such a huge and complex project.

Based on experience in pilot projects, many of the essential elements are already available in the computer systems of vendors, distributors, group purchasing organizations and hospitals. The challenge now is to adopt standard product and location codes that can be stored in a shared database.

Advantages to hospitals will include:

• Cost savings at many levels, from more accurate tier assignment to reduced staff time checking invoice discrepancies to improved capture of patient charges
• Patient safety improvement, from automatic verification of drug and supply ordering and administration
• Streamlining of logistics through consistent and accurate designation of delivery locations.

One vendor that has worked closely with hospitals and the Department of Defense during an ongoing pilot test is Becton Dickinson (BD), Franklin Lakes, N.J. Dennis Black, BD’s director of e-business, tells hospitals that once standards are implemented across the health care system, the result will be close to what supply chain experts call a “perfect order.” It is defined as a purchase order processed electronically from order to payment without human intervention, delivered to the correct location, on time, undamaged, at the right price, in the desired quantity, on the first attempt.

The tipping point

For the past six or seven years, advocates inside and out of the health care industry have tried to persuade hospitals and suppliers to use consistent identifiers and descriptions for products, buyers and sellers. Even though benefits were obvious—avoiding duplicate orders, improved price transparency and contract compliance, not to mention better patient safety through more accurate drug and supply controls—the idea has never taken hold.

Today, only 1 percent to 2 percent of U.S. hospitals have adopted the standards that are available, according to Jean Sargent, director of supply chain at University of Kentucky Health Care, Lexington.

In October 2007, Sargent was asked to attend a meeting of the Coalition for Healthcare e-Standards (CHeS) as part of her AHRMM presidential role. Also present were representatives from the Department of Defense, long an advocate of supply chain standards, and a newly formed organization called GS1 Healthcare US.

“We talked about how we could move the industry forward in adopting standards,” Sargent recalls. Now, she is part of the GS1 Healthcare US leadership team. Meanwhile, CHeS and other standards groups such as the Healthcare Supply Chain Standards Coalition (HSCSC) are working with GS1.

Based in Lawrenceville, N.J., and headed by President Dennis Harrison, GS1 Healthcare US was formed to implement standards issued by GS1 and its U.S. representative, GS1 US, formerly the Uniform Code Council.

Based in Brussels, GS1 is a not-for-profit organization of 108 members in a variety of industries, such as retail, manufacturing and government. It was created about 30 years ago by a group of manufacturers and retailers to reduce the cost of bringing goods to market. It issues supply chain standards used by more than 1 million companies in 150 countries, enabling 6 billion transactions per day. GS1 standards are the most widely used supply chain standards in the world.

GS1 issues product and delivery location numbers and maintains product information databases for many industries.

It has a global health care unit, GS1 Healthcare, which issues standards for medical devices and products, based on recommendations from its national chapters, including GS1 Healthcare US.

The national chapters, in turn, are charged with implementing those standards in their health care systems. Currently, 12 countries have national GS1 Healthcare chapters.

In addition to the United States, they are: France, Austria, Chile, United Kingdom, Germany, Serbia and Montenegro, Macedonia, New Zealand, Switzerland, Australia and Malta. An example of a GS1 standard adapted for health care is the EPCglobal Electronic Pedigree Messaging Standard, under development for the pharmaceutical industry to prevent counterfeiting. In the United States, the industry has reached a tipping point, according to Harrison: “A few years ago, we were debating, ‘Do we want standards, and if so, which ones?’ But now, we have settled on GS1. That debate seems to be over.”

Professional organizations, including AHRMM, have endorsed the standards and are encouraging their members to adopt them. According to Sargent and other sources, there is now consensus in the health care community that it is time to move forward.

One significant reason is that the FDA will soon issue regulations requiring unique identifiers on all medical devices. Another is that other countries are beginning to require suppliers to use internationally recognized product and location codes, and those suppliers do not want to have to maintain separate systems for their American customers.

Finally, GS1 Healthcare US has adopted the same set of standard identification codes that is used in nearly all other industries.

A couple of pilot programs have shown that vendors already have most of the required information in their systems, and need only to reformat it so hospital MMIS can accept the data with the addition of interface software.

The next step will be to bring the standards to hospitals and vendors, he says. “I call it the perfect storm. Everything’s come together now.”

Following the AHRMM meeting, on July 20–23 in San Antonio, Texas, GS1 Healthcare US work groups will meet for the second time. A third meeting is scheduled for Oct. 13–14 in Chicago.

What are the standards?

With the creation of GS1 Healthcare US, a major controversy in the development of standards was resolved.

It was this: Should health care adopt the same standards as other industries (such as grocery stores), or is the hospital supply chain so unique, with its medical terms and multiple delivery locations, that it has to design codes of its own?

The answer is that, with some modifications, the health care industry can use the same identification system as any other industry. For example, a data attribute might be added to a product code to indicate that it is sterile or latex-free.

The following are the primary standards hospitals will need to adopt:

• Global Trade Item Number (GTIN): This is the bar code or similar identifying label that transmits details about the product, such as color and unit of measure, usually through a scanner, among users, buyers and sellers, through a database shared by all.
• Global Location Number (GLN): This tells a vendor not only which hospital to deliver the product to, but potentially even which unit of which department on which floor. Hospitals must request GLNs to be assigned from a registry that GS1 US manages. Most group purchasing organizations will handle this for their members, including the associated fees.
• Global Data Synchronization Network (GDSN): When every vendor, GPO and hospital uses exactly the same GTIN and description for a product, anyone will be able to look up that product in the GDSN, a universal database. The result will be the elimination of duplicate orders, accurate assignment of contract tiers because products will no longer be recorded under varying names and numbers, and a vendor will be able to speak the same “language” to its pharmacy, retail and hospital customers that can all order a particular product.

In March, GS1 Healthcare US met and formed five work groups to focus on these standards, plus standards for product traceability, and procedures for implementation. The last group is still developing plans for how it will assist hospitals in converting to the new standards.

A first step, however, was writing an extensive manual (the tool kit) listing necessary actions and considerations. The tool kit is based in part on the results of two pilot project: one on adopting GLNs and the other on the GDSN.

Along the way, Sargent reminded her colleagues that the end users would be health care providers, not technical experts. Her value to the group, she believes, is not expertise in technology, but exactly the opposite—she offers the perspective of a supply chain executive trying to understand the new terms and operations in the context of delivering supplies within a hospital.

“I started as a blank slate,” she says. “I see my role as one that basically helps the rest of the team to understand what might work and what might not work as we continue to develop implementation toolkits.”

Among the insights the toolkit will offer is how to sell the adoption of standards to higher management, and how to calculate return on investment.

One thing the guide does not contain, however, is an estimate of the initial investment required. The implementation work group is still studying that issue.

Hospital focus

It will be quite a leap to go from 1 percent or 2 percent of hospitals using standards to 100 percent participation, but Sargent sees the industry making dramatic headway by the end of this year.

However, progress will not be uniform because each standard will need to be implemented differently. For the GLN, GPOs are already working very closely with hospitals, Sargent notes. But it will be up to hospitals to take the lead in switching to the new GTIN product identifiers. “Manufacturers, distributors and GPOs are looking to providers to drive adoption, Sargent says.

That, Harrison maintains, is why hospitals need to start taking the lead.

“We’re talking about improving the supply chain for health care,” he explains. “We need to involve the end users. When we work on standards, the end user is as important as the manufacturer. If a manufacturer puts on a bar code for Wal-Mart and Wal-Mart has no interest, it will give up. Hospitals are the same. The hospitals have got to be using the system, or we’re doing it for nothing.” For that reason, he says, the focus of GS1 Healthcare US is now on implementation.

Black says his company and others are ready to go, but need a final push from hospitals. “Although the standards are well developed, there will be some subtle nuances that will differ from using these standards in other industries,” he notes. “Also, providers need to influence the pace of adoption. In other industries the customer dictates the pace of adoption when standards are implemented. For example, it is virtually impossible for a manufacturer to make use of GLNs until health care providers have assigned a specific GLN to all of their ship-to locations.”

Sargent adds, “We’re 30 years behind the grocery industry. It’s time to get this done.”  

Paula DeJohn is a freelance writer based in Denver.

This article first appeared in the July 2008 issue of Materials Management in Health Care.

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