Clearly there is a strong movement in the health care industry to improve patient safety and increase hospital efficiencies. Chief among these goals is to reduce the alarming number of medical errors as well as better control health care costs. Supplies represent the second largest expense to U.S. hospitals after labor expenses, an estimated $200 billion annually. Streamlining the supply chain will result in billions of dollars saved, and suppliers and health care providers are recognizing that supply chain efficiency and improving patient safety are linked.
The absence of a unique device identifier (UDI) causes patient safety issues. Unlike virtually every other product in commerce, medical supplies and devices cannot be identified in a systematic and consistent manner. Without a UDI, it is difficult to track the recipient of a faulty product (e.g., recalls of implantable devices) or to accurately and consistently track adverse events related to a specific product.
Recalled peanut butter contaminated with Salmonella can be quickly and efficiently removed from shelves, but we can’t reliably identify potentially life-threatening recalled or defective medical devices. Most experts also agree that one of the primary reasons for increased supply costs and the inefficiency of the health care supply chain is the lack of a UDI.
Inconsistent product identification
The absence of a UDI also results in “dirty” or inaccurate product item masters that create mismatches in accounts payable, wasted clinician time searching for correct products, and inaccurate pricing, rebates, returns and credits.
Nearly 6,000 hospitals in the United States are buying from more than 22,000 manufacturers and distributors.
The health care supply chain wastes 24 percent to 30 percent of supply administration time on data cleaning and corrections at a cost of billions of dollars, according to a 2003 Medical Product Data Utility (PDU) Feasibility Study conducted by the Coalition for Healthcare eStandards (CHeS) and the Health Care eBusiness Collaborative (HCEC).
A better way
Other multibillion dollar industries, including grocery and retail, run their supply chains more effectively. What is their secret? Data synchronization is a tool that brings consistency of product information to every part of the supply chain. It is a two-step process.
First, manufacturer data on products (UDI) is submitted to a PDU where it is synchronized, audited, verified and distributed to members of the supply chain. The PDU registers, validates, disseminates and synchronizes product data throughout the supply chain. A health care PDU would enable all participants to synchronize and maintain accurate item files in near-real time from the manufacturers through the supply chain to the end user.
PDU flow lagging in health care
Despite the work of other industries, which engage in data synchronization through a PDU, the health care industry, one of the largest in the United States, has yet to adopt this logical, cost-effective and proven process. As determined in a 2006 Premier Safety Institute survey, (see sample of survey results, page 30), more than 80 percent of respondents stated that a national UDI system would enhance patient safety.
However, every participant in the health care supply chain needs to support the effort to have a UDI, the initial and key component in the overall synchronization of medical supply and device data.
Congress has already agreed this is an important issue and is working on a bill that will require the FDA to create a UDI system for medical devices. The time for action is now.
Joseph Pleasant is the CIO for Premier Inc., Charlotte, N.C.
This article first appeared in the September 2007 issue of Materials Management in Health Care.
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