The cloud presents an enormous opportunity for procurement in healthcare to expedite transactions with efficiency and agility. A cloud-based platform eliminates many obstacles enabling a smoother process for transactions and shipments. Imagine the benefits, for example, of speeding the replenishment process, or eventually, a world in which replenishments refill automatically.
The healthcare industry is undergoing significant change. In response, supply chain has the potential to make forward progress in both new and old problems, but success in the new environment calls for a different approach. Where a traditional approach may feel more comfortable, the industry must embrace innovative thinking to tackle the challenges in this new era.
The movement of care from the acute to non-acute settings is undeniable. Far from just traditional primary care, the activity taking place in outpatient (OP) settings is including more complex surgical procedures than ever before. By as early as next year an estimated 64% of surgical cases will be performed in the OP environment, with 60% of those cases being done in Ambulatory Surgical Centers (ASCs). Some service lines, like Spine and Orthopedics have projected growth in OP locations of 35% or greater over the next 10 years. These numbers will continue to grow as the Centers for Medicare & Medicaid Services (CMS) approves more and more procedures for reimbursement in OP and ASCs.
In my previous blog post, I described how the healthcare industry has yet to tackle standardization and automation of so-called “advanced” supply chain transaction sets. These are processes around pricing alignment and reconciliation that go beyond the basics of placing an order, delivering the products and billing for those products. The manual management of price changes in healthcare is complex, challenging and costly, placing a significant burden on all parties to a contract (e.g. manufacturer, distributor, provider, GPO).
Essential to supply chain, and the key to keeping an organization stocked with the supplies needed to operate is the procurement of goods and services. The importance of this process can’t be understated in the case of healthcare, where lives are literally on the line and depending on the right supplies when they are needed.
Traditionally, the procurement process has lagged behind other business processes in advancements relating to efficiency and automation, but that is changing. Cloud-based technology is enabling procurement to make progress along the lines of data interoperability, and visibility and agility in transactions.
Two decades ago, a few healthcare supply chain partners decided to automate basic transactions so that they could improve efficiency and accuracy and reduce costs – and the GHX Exchange was born. Today over 10 thousand supplier divisions and 19 thousand provider facilities use GHX standards to automate the four core supply chain documents: The purchase order (850), purchase order acknowledgment (855), advance ship notice (856) and invoice (810). These “basic” supply chain transactions encompass the processes around placing an order, delivering the products and billing for those products.