Cleaning Up Supply Chain Data

Executive dialogue series

Cleaning Up Supply Chain Data

By all accounts, lack of data integrity in the health care supply chain is costing hospitals, manufacturers, distributors and group purchasing organizations billions of dollars each year. Inaccurate item masters, lack of standards in how products are identified for e-commerce and a lack of synchronization between supplier data and information maintained by materials management systems and other data-related problems are sending troublesome ripples through the supply chain. Health Forum convened a group of health care executives and industry experts for a closed-door dialogue Sept. 7 in Chicago to discuss ways to achieve data integrity. Health Forum would like to thank all the participants for their open and candid discussion, as well as the sponsors for supporting this event.

MODERATOR
(Bob Kehoe, Materials Management in Health Care): How does the lack of data standards or inability to synchronize data impact your organization, and what are you doing to address the issue?

BILL FRANCIS
(Hospital Corporation of America): At HCA, we have a home-grown materials system called Health Smart. That system was built around a stand-alone mentality. Every hospital had its own item and vendor master file, so every hospital did its own file maintenance.

As a result, each hospital developed its own numbering schemes, so we had no way to compare across our enterprise what we were purchasing from whom we were purchasing, and what our pricing levels were. It created issues with placing accurate orders, invoice discrepancies and incorrect shipments.

We came to the realization that we should really take advantage of our size. We looked at enterprise resource planning systems. Although we wound up not implementing an ERP system, the concept of implementing a single master file got senior management’s attention, so we developed a product that reduced the number of items and vendors and eliminated duplication.

The fact that we accomplished that has paid off in big ways in terms of our ability not only to place accurate orders, but also to analyze and evaluate what we’re buying, who we’re buying it from and what we’re paying for it.

TOMI RYBA
(UCSF Medical Center): We are taking a look at our clinical and operational data to make sure that when we drive our decisions and business plans, we really have integrity in that data. As an academic institution, we’ve got an obligation and a responsibility to understand how the data is helpful to our providers and how the data supports their decisions.

MODERATOR: Where do you see yourself today in this evolution? How far along are you?

RYBA: We are in varying stages of development. A couple of years ago, we undertook a major effort to standardize and clean up our item master file. It was really helpful internally. We then linked it to our clinical systems. It provides the information we need to conduct business in our clinical departments.

GARY WAGNER
(The Methodist Hospital): We do have one item file for our system, and that works really well, but the interface with all the other systems is a challenge. We don’t have a field large enough to even take descriptions for items, whether it’s for finance, the operating room or the cath lab. Even though we have one item description, one item master, when I talk to my customers, they don’t care about the number. They only care about how they learned the product and description when they came into health care 20 years ago. So I must have 15 different terms for every product. Even if we’d all agree in this room what the description is going to be, training and educating the 10,000 people at Methodist would be extensive. Such education would be necessary to make this happen so we can send out bills and get the right product to the right patient. We have a ton of work to do, and I’m not sure it will happen in our lifetimes.

MODERATOR: Obviously there are clinical, business and financial issues wrapped up in this. How does GHX fit into this discussion?

MJ WYLIE
(GHX): Data integrity problems have surfaced and accelerated in the supply chain and health care simply because of the introduction of e-commerce and more organizations looking at ways to improve efficiency.

Data is very important; that’s why we built an electronic catalog. But we want all transactions to be accurate, not just electronic. We are looking for ways to collaborate across the supply chain to improve accuracy and efficiency. We’re more than just the transaction engine, we look at the supply chain in its totality. There are many opportunities for more interaction among all supply chain participants.

ROBERTA GRAHAM
(University HealthSystem Consortium): We have a long history of data in a lot of areas, and we’ve been in the supply chain business for a lot of years, but we’ve never brought those two together very effectively.

So, in the last couple of years, we’ve worked to take our well established clinical database and our well established operational database and have found ways to apply that in the supply chain. We’re trying to broaden the definition of the supply chain, getting it to be about not just the item master and the charge master, but also to be a tool to help manage our business.

RYBA: Electronic transactions force organizations to have data integrity or else the transactions are going to fail. One of the reasons that the market has not progressed is because only 60 or so vendors are trading electronically on GHX. We have 4,200 names in our vendor file. Until we get more of the market actually doing electronic transactions, we’re each going to be managing our own database.

FRANCIS: Without industry standards, we’re really missing the big part of what we can capture. As I look at this industry, I don’t think anybody’s to blame. I think everybody, including the manufacturers, the providers, the distributors and the GPOs would like to see this improve.

MODERATOR: What are you doing to address the problems when data doesn’t match up and you have products that can’t be accounted for properly in the system?

TOM STENGER
(BJC HealthCare): We’ve reduced errors by 60 percent to 70 percent through data cleansing processes. Errors are happening less frequently and we take less time to fix them when they do occur because we’re putting in the technology to make it faster to fix the errors. In health care, the consequences for errors may be severe. A delay in getting the right products to the departments in a timely manner can have bad consequences.

And then, of course, there’s the financial aspect. There’s huge savings to be obtained through contracting. But you have to have an accurate depiction of what you are using and how you are using it.

There are also real dollars to be saved in utilization and management. Our product selection teams review best practices and base their decisions clinically. We try to provide them with the best information to make the decisions on the product.

MODERATOR: What kinds of costs and potential savings are we talking about?

RYBA: For a billion dollar organization, 20 percent of the revenue goes toward supply. When I talk about supply, I include pharmacy, gloves, medical and nonmedical items. You have to protect that investment of $200 million you’re spending every year, and you always have to go back to remember what decisions you made with the data.

It’s critical that we remind ourselves of the decisions we’re making on the data that we have, presuming that it has integrity. Data integrity impacts patient safety and our business. It impacts our ability to be competitive in the marketplace.

FRANCIS: We have not quantified the cost of a transaction. Intuitively, we know that a dirty transaction costs us money. Most hospitals, depending on their service levels, will have supply cost percentages ranging from the high teens to the mid-twenties. That’s huge.

The hidden cost is that of ordering the wrong product and getting the wrong product. Certainly, there are potential patient safety implications, too. That’s the most important thing. But beyond that, this should be the simple part of health care. Health care is complicated enough without making our supply ordering and receiving as difficult as it is. It’s incumbent on the industry to try to come up with some solutions.

WYLIE: When we begin working with a hospital, we look at all of their data and compare it against our catalog. On average, we find discrepancies in about a third of the data. There’s so much that needs to be done. Data has to be synchronized for the order to be accurate. That’s the whole reason that GHX got started. That’s what our members want. We came up with a rules-based engine, developing a real-time, content-intelligent product that synchronizes data in real time.

We were actually accused of enabling poor data, but we send information back to the hospital identifying the bad data. If the information isn’t incorporated into their system, then the problems will perpetuate. When your item master doesn’t match, it’s a big problem. We all have many disparate systems that need to be connected.

As Tomi said, if you’re making business decisions off of data that you already know has a problem, how efficient is your decision-making? When we look at how much it costs for just a purchase order, perhaps that’s wrong. I have stats that range from $15 to $75 per line. The biggest problem is that we don’t know what we don’t know. There are tremendous opportunities to eliminate unnecessary costs from the system. It’s a matter of identifying the problem and making the appropriate corrections.

GRAHAM: Cleaning up the item master, making sure the organization is paying the right price and making sure the organization is getting the best price results in about a 5 percent to 7 percent savings.

The big savings is actually on the utilization side. That’s where the data gets really important. You can’t sit down with a physician and say we want to talk to you about why your costs are a lot higher than everybody else’s without having accurate data of what that physician is using. You need to know the costs, the consequences and the reasons behind the selection. You don’t get a second chance with that physician or group of physicians.

MODERATOR: How can suppliers, such as Cardinal, impact the situation?

DALE MEIXELSPERGER
(Cardinal Health): We work with our providers and really work in-depth with them so that we can make better decisions together, leveraging the materials and the clinicians. It’s one thing to communicate between the carrier and the materials management department. But we’re seeing that within the institutions, materials is not hooked up with the OR system or other departments.

The problem goes a lot deeper. The first step is to work with the data. That is the source of truth. We work with our customers to help them correctly size their inventories. Most organizations carry too much inventory for a reason. We work with them to identify the reasons and see if we can enact change. It may be because they have clinicians doing the ordering versus the material techs. We go over the data with them and work extensively to make sure we make the right changes as far as product shelf-life, storage space and what technology is going to be used.

GRAHAM: One of the challenges, however, is that the different players in this may have different goals. Manufacturers, distributors, providers and GPOs all talk about clean data, but are we all ready to have the level of transparency to get to that point? Are we willing to develop systems that allow the evaluation of clinical equivalency?

From a provider perspective, it’s about wanting to get the right product at the best price, but there might be three or four products that could be the right product. Right now, there’s no system that brings them together and says here’s the four products that you can choose from that would meet your need, and here’s the price. But manufacturers or other groups may be opposed to such a system.

MODERATOR: What does synchronization mean to your organizations and are you moving in that direction? Do you feel you’re close to achieving that level of performance?

STENGER: Three years ago we built an item master and a contract master internally. We have more than 30 interfaces for our OR systems, different inventory systems and a remote inventory control system. As we developed our item master and contract master, we tried to keep them in sync. We built an Oracle database to help us do that. We have one item master and then we bounce the data against each other.

Quite frankly, it’s a challenge to set standards within the organization and across the different departments, agree on procedures and determine who owns the data. And then you have to synchronize or standardize the data with all of the different vendors.

I try to keep things simple. Within the next two years, we’ll hopefully have all of our contracts in electronic files. From there, we should be able to synchronize our own systems. We do EDI with more than 60 vendors, mostly through GHX. And we have a direct connection with Cardinal. I think that data is well synchronized with the vendors, because we keep it clean and we see that data in real time. We have about 100 vendors that account for 80 percent of supplies. It’s a challenge to get them to the table to try to get efficiencies.

We’re making progress. We keep talking about the savings that organizations can achieve. But manufacturers, distributors and the other players should realize that they gain as well. They actually can gain market share while driving efficiencies in the system.

WAGNER: Data is sacred. Think about all the people that can actually change the data on a moment’s notice. There are probably six people that can change a price at any time, day or night, without me asking them to do so. That includes the GPO, the local sales guy and a bunch of people in between. And I might not know that it occurs. We have to make it sacred.

FRANCIS: The idea of synchronization, to me, is that everybody in the supply chain is speaking the same language. We must have unique identifiers on who the vendors are, on who the providers are, on what the products are.

The problem that I see is that even within manufacturing companies, they don’t have data synchronization. Time and time again, when we’re doing contracting, we’ll arrive at a contract with a manufacturer for a given price file, and the file we get from their sales and marketing folks will be different than what we get from the operations folks. We’ll have obsolete products. We’ll have all kinds of discrepancies. Then when that pile goes to the distributor for those folks to load, once again, we have different information because the distributor will tell us that what’s on that file is obsolete. And it just goes downhill from there. That’s one reason why it takes GPOs so long to get accurate price files loaded. They have to get the manufacturers and the distributors to agree on the actual items in the contract.

RYBA: For us, synchronization is putting databases together with a common definition. We have to be cautious not to go too quickly and to actually take the time to understand the definition of the data and how it relates to other systems. In the end, we want to have a profile of what’s going on in the care or the business decisions that we’re making.

STENGER: Synchronization is the ability to take a transaction or an item number and use it to purchase a product, get the product and be able to get to the charging systems or the OR systems and have it go into the patient preference. It’s having a transaction go full-circle without error.

MEIXELSPERGER: When getting into data synchronization, you have to define what data is as well as what systems you’ve got to interface with. Once you get that, you can start synchronizing data. From a distributor’s perspective, it’s all about delivering the right products to the right place at the right time. It requires effective communication.

MODERATOR: Where does data standardization rank within your own priority list, say over the next year or two years? What are you doing about it?

RYBA: We work with the other academic hospitals around the country to do a lot of benchmarking and comparison. Even within that realm, of course, there are data integrity issues.

We are working with other institutions like ours that are interested in the integrity of the data. We might create a power user group to show that this really matters. We’re going to invest in the infrastructure and the audit control to make sure the integrity is in place. We’re trying to establish an infrastructure to support the data and integrity.

And then we work with peers so that we can at least rely on that information from a benchmarking perspective, so when we do meet with the physicians and make decisions around products or care decisions, the data is as solid as possible.

FRANCIS: Over the past four years, HCA has invested quite a bit of money in the data standardization area. It has many facets. We have a pretty extensive patient safety initiative going on. Obviously, this information is one component of the patient safety initiative. It’s one of those initiatives that had other pleasant benefits and provided us the ability to evaluate our information.

We did a basic standardization first to make sure we had the duplication removed from our vendor file and our vendors were appropriately identified. That led us to getting the correct product number from a catalog number or a distributor number assigned to that item. From there, we worked with GHX to do some advanced content. We went back and normalized all of our descriptions, and we constructed them in a certain way with a noun always first, with other descriptors in a certain order with standard abbreviations. We populated it with a United Nations Standard Products and Services Code (UNSPSC). And we’re continuing to work with them to refine that information. And we’ve modified our systems to be able to store and transact on UPNs.

For years, we’ve asked manufacturers to publish UPNs, and we felt that in order to show a good-faith effort, we needed to modify our systems to use UPNs. We can’t expect manufacturers to provide them if we’re not prepared to use them.

GRAHAM: We’ve decided that we can’t wait anymore for the industry to develop the standards, so we’re in the process of investing several million dollars to come up with a system that will allow us to take our members’ data, and synchronize and clean it.

But all that means is that you’re going to have a great system, and we’re going to have a great system. I’m concerned that there’s no driver to bring it together as an industry. It’s hard for me to figure out who that is. After we’ve invested millions of dollars, it’s going to be even harder for us to give up what we’ve been doing to develop an industry standard. I’m just worried that this train is running down the track and heading to a place that might not be any better.

LIZ HINTZ
(Cardinal Health): It is a problem. We’re so slow to react as an industry that everybody is making their own decisions. It just introduces more complexity into the system.

WYLIE: There are standardization efforts going on right now by a lot of the manufacturers. Are they ready to transact on some of those decisions? Are they ready to push that out or populate it or publish to even our electronic catalog? Maybe not right this minute, but it will happen.

We have over two million products in the catalog, so we feel that it’s an industry resource for data synchronization. Our data synchronization platform is going on almost six years, working with a lot of individual hospitals, some of our GPO members, as well as some manufacturers. That’s happening even if they’re not conducting electronic transmissions or transactions with us. There’s so much going on right now. I see the glass as half full. I think the industry is moving in the right direction.

STENGER: Part of the issue with health care is that change is constant. For example, 20 percent of the item file is going to change each year because technology is going to change. Health care is moving in the right direction, but it’s a bit overwhelming. Not everyone is moving at the same speed. But we have to start somewhere. We have to build systems for the manufacturers and other entities that are willing and able to send data.

HINTZ: As a distributor, we continue to try to push electronic transactions and standardization. But at the end of the day, it’s the customers—the purchasers—that are going to have to demand that manufacturers get things done.

MODERATOR: With all the reasons we’re talking about here, why is there not motivation to make improvements?

HINTZ: The manufacturers are out there saying there’s a lot of cost in the system and they want to help solve the problem, but I don’t know if they necessarily believe that. I do think they believe there is some advantage to having disparity in data and processes across the industry. As a group, I don’t think they’re motivated to work together. The customer carries the weight in all this.

STENGER: It’s important to build flexible systems. For example, Boston Scientific came to us and told us they wanted to go live with UPNs. We changed 3,000 product codes over a couple of hours and were able to go live the next day. We were able to do that because we built a system that was flexible. We are able to compare data and make changes because that’s part of our strategy. We know that’s important.

WAGNER: The customer should drive this. The problem, however, is that there aren’t enough people to drive the initiative. And most organizations don’t have the information systems. Most systems have a hard enough time keeping their item master clean enough to actually perform transactions with their vendors. We have one hospital that’s not even on the same system that we use throughout our system. We all have that piece to deal with, so it’s going to take a while before we can get any substantial improvement. We need forums like this to move it higher on the ladder of the supply chain. A lot of folks are just trying to deal with managing the 20 percent they spend on supplies. They don’t understand that it would be a lot easier to manage if we have data to fix it on the front end instead of on the back end.

I don’t know what it’s going to take to wake us up, but it’s going to be some catastrophic event to get everyone to push forward.

FRANCIS: Obviously, there are a lot of the commodity areas where we do have the ability to move the business, and we can make certain demands. But we have very little leverage in a lot of areas. Again, it’s a complex situation.

WYLIE: The time has come for standardization. Before, we’ve tried to contemplate how to come out pushing this without looking competitive.

GHX is very much in a position now to say we represent the key industry leaders in the health care supply chain. We are working with quite a few organizations and key leaders to bring together more of a broad-based group. We’re in the formative stages right now.

The biggest thing they said when they got together is that they don’t want yet another standards organization. They want action. There’s a lot of optimism because for the first time all of the supply chain participants are actually coming to talk about this one issue. We all created the problem, so it’s going to take all of us to fix the problem.

MODERATOR: Globally speaking, what will the development and implementation of standards achieve?

GRAHAM: Simply put, we need to identify the manufacturers with a unique identifier, we need to identify the providers with a unique identifier and we need to identify the products with a unique identifier. There needs to be something that identifies where the product goes to and what the product is. It’s actually not one set of standards. We need a couple of sets of standards.

HINTZ: I find it fascinating that as an industry we get so worked up about this concept of picking an identifier. Honestly, who cares? Pick one.

We’re the largest Health Industry Number subscriber, and we have an HIN cross-reference to every customer number. The problem is that we derive almost no value from it because while a lot of the manufacturers say they’re proponents of HINs, none of them transact with it. I’ve yet to be able to derive the value between the customer interfacing with us and the HIN, too. Global Locator Numbers have to provide more than just a numbering option. They have to address the relationship of a product to the purchaser. For example, they should be able to get the right price to the customer.

GRAHAM: That’s a great point. We actually looked at this closely a couple of years ago. We considered whether we should use an HIN versus a GLN. We looked at many of our members and determined that many had 200 to 300 ship-to locations. Managing all of the different components is easier with a GLN than with an HIN. So we’ve come out in support of the GLN. But that wave seems to have crested. I’m not sure the interest is there anymore.

If we could think more clearly about what the impact of this is on patient safety, we could get some leverage. For instance, quality data can prevent ordering supplies that are incompatible with other products, such as ordering tubing that doesn’t match the pump.

WYLIE: The organization ID and the product ID are simply the primary common vocabulary that we need to move forward. The result of those two allow true data synchronization. The GLN is gaining momentum on the manufacturer side. The intelligence portion of those numbers and those relationships are important. It’s very much an evolution. As UPNs are starting to be published and people are starting to synchronize and transact on those data points, trust is gained.

MODERATOR: Imagine if patients were sitting in this room right now. They hear a lot of terms being thrown around. But what does it mean to them?

GRAHAM: It means getting the right products to facilitate their care in an efficient manner. We need to make sure that organizations can identify and obtain products in a timely manner.

MEIXELSPERGER: It is about supply-chain efficiencies. If the right product isn’t there, it may result in delays in care.

WAGNER: Being able to send data electronically means being able to order supplies, receive, pay, deliver them and get them to the right patient. We have a lot of tools to help with this, but it doesn’t all operate in sync because we as a group—the health care suppliers, the GPOs, the manufacturers—have ignored this.

GRAHAM: Safety is the issue that we can all agree upon. We can create a platform around safety.

RYBA: It’s about a nurse, a physician and a radiology tech being able to have access to the right item at the right time to make their surroundings sufficient. The patient-safety piece is one that we all give the highest moral and ethical imperative. If we can get back to that, if our systems allow the providers and the nurses to just make decisions and have access to the right products at the right time, that’s where we need to be.

MODERATOR: How do we get everybody’s supply chain systems to speak the same language and provide the level of information that all the parties in the process really require? What will it take to get there?

WAGNER: I think it’s going to take more organizations like GHX to come to the forefront and develop a product to fix this. We cannot continue to develop system after system. We must have someone whohas tools and data who can help us fix it, and I don’t see too many people out there. We’re going to either have to rally as a group or else the industry will have to rally around one entity to accomplish this.

WYLIE: One of the things our model has proven is that we can bring people to the table to talk about it. Our membership comes together to discuss this. Sometimes the discussions are painful. Our role is more of a consultant, to bring everyone together and let them decide how they want the industry to represent itself.

STENGER: We really do need a third party to serve as a resource to pool and house the data because none of us at this table probably are very good at it. The only way the market’s going to move is if we all decide that it is in the market’s best interest. I think the momentum is gathering for this. It’s in everyone’s best interest that it happen.

GRAHAM: The FDA sent out in the Federal Register on August 11 a request for comments on the development of a unique device identification system for health care. So the federal government is throwing its hat into the arena.

FRANCIS: I don’t know which arm of the government is more appropriate to oversee this process. But they are paying attention. Hospitals have paid a great deal of attention to expanding market share and have paid little attention to the supply chain. Most hospitals are experiencing shrinking margins because the costs are getting out of control and that is drawing more attention. Unless we get hold of this and do something within the industry to try to drive efficiencies, we’re inviting regulation.

GRAHAM: As was stated earlier, about 20 percent of a hospital’s operating expenses are in supplies. That’s a big number. But when we go out and ask our CEOs every year about their strategic issues, we don’t get any feedback about managing these costs. What will it take to get senior people to believe we’ve got to do a better job of managing that 20 percent of the budget? We struggle with that.

RYBA: I believe there’s a lot of attention paid to the 20 percent but there may not be as much attention focused on what’s creating and causing the inefficiency. There has to be a detailed understanding of what’s driving the cost. It requires an extensive look at utilization, among other things.

FRANCIS: There is a lot of attention within organizations on the supply side. There’s a lot of attention paid to product mix and soft cost. One of the things HCA has done is moved to a shared services environment where we’re taking a lot of those back-office operations out of hospitals and putting them in service centers to achieve efficiencies.

MODERATOR: Are hospitals equipped from a technology standpoint of changing either data standardization or synchronization today?

RYBA: Hospitals are not well positioned. We are just getting into the development stage where we’re looking at the disparate systems to develop a portal where we bring all these different systems together and they can relate to one another in a better way. We will then get a bigger profile of the patient care experience as opposed to just one small increment of what we’re about.

We talk about supplies, but it’s always in the context of the whole. We can’t lose the context. The context is around patient safety, the business aspects of running hospitals in a large system. The supply chain is one small element. When you’re working with 20 different IT companies for your financial systems, business systems, pharmacy, radiology, lab, among others, it’s difficult to bring it all together.

We’re trying desperately to link the supply component of our business. It’s embedded in all of our conversations, whether we’re talking about service lines or patient safety. The supply chain isn’t a stand-alone entity. It has so many tentacles that interact with what we do in our business every day. We shouldn’t talk about supplies without talking about patient care, without talking about operations, management and cost efficiency. To me, it’s all the same thing.

WAGNER: We’re trying to do that. We try to get supplies on the appropriate agendas. But it’s not the top priority. For instance, when we’re buying an information system, whether it’s for radiology or cardiology, how that system will interact with the supply chain is not a priority. But it is important how the system will interface with the supply chain. It doesn’t become an issue until after the fact.

FRANCIS: We’re probably in a better position than some organizations because of our size. We have made a significant investment in IT services. Many of our systems are homegrown, but some of them are not. Regardless, it is a challenge. As large as we are, it’s still a challenge integrating our clinical systems with our supply chain systems.

It’s extremely difficult for organizations that are involved in mergers and acquisitions. Typically with a merger, you’re going to pick up a set of systems that aren’t compatible with the other systems you’re running. Then you face the question of going through significant cost and organizational change to convert those systems or trying to correlate the data between them. Neither one is a great solution, although I would suggest that the cost and inconvenience of converting to a single system is still the lesser of the evils.

HINTZ: One of the challenges we face dealing with our customers is the multitude of systems out there. Even if we’re working with Lawson systems, there are so many different versions. It’s difficult from an interface standpoint to build for each of these individual materials management information systems. Basically you have to build a customer interface for every system, and there are thousands of possible systems out there.

MODERATOR: Assuming the industry does reach some consensus, will we then have to make a significant investment in information technology?

GRAHAM: Most organizations are making investments to install electronic medical records, bedside documentation, etc. In terms of priorities, it’s going to be very difficult to direct the dollars to the supply chain.

We want to focus more on utilization, so we’re collecting line-item billing data for our members. Well, we can look at pharmacy because every drug has a unique identification number—the NDC. We can tell you exactly what drugs are being used for each patient. When we carry that over to supplies, there’s no way to do that.

Even on the lab side, everybody names a complete blood count something different. It all comes back to having some common set of identifiers.

WYLIE: When we talk about the supply chain, it’s critical that the technology group be involved. As Tomi said, you have to build in the way to make the next change. The UPN is coming, so the materials management information system vendors need to be involved.

FRANCIS: HIPAA creates another challenge. In many ways, it’s a good thing, but it also creates a fear to release data. As a result, we’ve built systems that at times prevent us from really sharing data that could be beneficial. It creates an obstacle to sharing supply chain data freely.

MODERATOR: For the hospitals, what are you doing to try to get senior management to fully recognize how serious the issue is from a clinical perspective and a business perspective?

RYBA: Well, I’m part of the senior management team. I’m at the table and driving these priorities. Of course, we have a huge demand for capital dollars, and we do our best to make informed choices to set our priorities. We recognize the importance of IT investments. When we make capital decisions, we always place emphasis on patient safety.
But we also can’t afford to let business systems languish. So we’ve got to maintain and strike a balance between clinical care and the business side.

FRANCIS: This is one of the most difficult things for health care organizations. We have a rather large IT organization that supports HCA. And clearly, every department, every facility can come up with proposed projects that make sense. Every one of them is worthy. The question is how do you set priorities? How you do arrive at a decision that is going to make your resources perform at their highest and best use? It takes up a tremendous amount of resources within the organization, trying to prioritize these things. We’ve got quite an elaborate little setup here for doing that.

STENGER: We have a two-year capital cycle. When it comes time to make a decision, all of the groups are brought together to make the case for their request. I’m not the best at this, so I bring in representatives from all of the different areas that are touched by this. They help illustrate the scope of the project. They can make an effective case.

WAGNER: We all have our own strategy on how we’re going to fund or capitalize our operations. I focus on regulations, on patient safety and on new technology. We have 10,000 people in our organization. I provide some of them pens and I provide some of them heart valves. They’re both just as important. That’s how I look at it. If you want me to do my job successfully every day, I need the right tools.

MODERATOR: Can trading partners help hospitals achieve data synchronization today and, if so, how?

GRAHAM: Absolutely. We get frustrated at times because we feel that our job is to work closely with the trading partners and bring the trading partners to the table. We need to take a more active role in that. We want these groups to recognize the mutual benefits. That will be a big focus for us over the next couple of years.

MODERATOR: What do you see as the top challenges today for your organization and for the field as a whole? What are the barriers to standardization?

GRAHAM: We’re focusing on the identification numbers that will tell the product, the unit of measure, where it’s going and who’s using it. That’s an important component. Utilization is hard to manage without some type of common identification. It’s difficult to obtain an accurate picture.

HINTZ: Achieving data synchronization across the industry is nearly impossible because everyone’s doing it on their own. And then there’s the issue of who owns the data.

It won’t happen unless there’s a central repository to manage the data. We don’t have an 800-pound gorilla driving any standards, so what we need is someone who can take it and force it through.

MODERATOR: What’s the next step? How do we get this going in the right direction? What will it take to develop a solution?

FRANCIS: Liz just touched upon this. We need a single source of truth, a single repository, something that we can connect with to avoid the hundreds and thousands of interfaces being built. We can’t accomplish standardization across the industry without some single point of entry and a single place to maintain the data. To me, that’s the biggest challenge we have. That’s the only way that we will achieve real efficiencies. It has to happen.

WAGNER: That’s exactly what I want. I want to go to one source for clean data. Right now, we have to go to so many different places to get the information we need. That data repository will provide me everything I need. It would be a big boost for us. We don’t have all of the resources to do it ourselves. It has to be done by an independent entity that focuses on nothing else.

RYBA: This may not be a popular answer, but we almost need a third-party organization such as the Joint Commission to oversee product standardization. It would maintain agreed-upon standards and definitions with the support of all four areas: manufacturers, GPOs, distributions and providers. It doesn’t have to be a government entity. It would serve as a formal recognition, setting standards and ground rules accepted by all of the different parties. It would simplify the process.

Panelists

Bill Francis Vice President GPO Operations HCA Nashville	Dale Meixelsperger Director of Marketing, Medical Products and Services Supply Chain Solutions Cardinal Health McGaw Park, Ill.	Gary Wagner Vice President, Supply Chain The Methodist Hospital Houston
Roberta Graham Senior Vice President University HealthSystem Consortium Oak Brook, Ill.	Tomi Ryba Chief Operating Office UCSF Medical Center San Francisco	MJ Wylie Executive Director Global Data Standardization GHX Westminster, Colo.
Liz Hintz Vice President, Pricing and Contract Administration Cardinal Health McGaw Park, Ill.	Tom Stenger Manager, Materials Management BJC HealthCare St. Louis	Moderator Bob Kehoe Executive Editor Materials Management in Health Care Chicago

Thanks

Materials Management in Health Care would like to thank the panelists for taking part in “Cleaning Up Supply Chain Data,” with special thanks to our sponsors:

Cardinal Health
GHX
University HealthSystem Consortium

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