The outlook for the 2019 healthcare supply chain is an ebb and flow of constantly responding to changing direction and approach to process improvement, new technologies and changing industry trends. The landscape is becoming more and more complex for our leaders to navigate, and keep pace, while continuing to demonstrate financial improvements across the organization.
Healthcare organizations today are taking a step back to evaluate the approach to patient care environments while improving standards for Cost, Quality, and Outcomes (CQO). We are beginning to see many new partnerships in the provider space for innovative strategies to address rising supply costs, clinical demands and financial responsibility.
Why can’t we agree upon standardized product identifiers within healthcare organizations?
During the 2018 GHX Healthcare Supply Chain Summit, Terrie L. Reed, M.S. Industrial Engineering, FDA senior advisor for UDI Adoption, and Susan A. Morris, healthcare executive at Cerner, facilitated a discussion around the challenges that are holding healthcare providers back from implementing unique device identifiers (UDI) for products used in patient care. While many leading health systems and hospitals have begun using UDIs within their supply chain operations, there is still much work to do and obstacles to overcome in order to bridge the UDI over to the clinical side of care.
Day Sales Outstanding (DSO). It's on the minds of a lot of healthcare suppliers as of late. That's because the timeliness of your accounts receivables directly correlates to cash flow, which reflects the health of your business and ability to invest in more inventory, parts and people. Essentially, the number of days it takes to receive payments from customers can impact your ability to grow and invest in your business.
Adding complexity to the matter is that oftentimes healthcare providers would like to hang onto their cash as long as possible in order to improve their own cash position. Not to mention, the healthcare industry is navigating significant changes that can be felt in a number of ways. Many suppliers are feeling the pressure in cost containment, payment automation, credit card fees, provider demands and expectations, and the need for more efficient processes.
Very few health systems know the true cost of a patient care procedure. Historically it is not something we have accurately captured as a healthcare industry. But as we move to value-based payment models, and seek to deliver higher quality care at a lower cost, we need to know the cost of care, including the cost of supplies used in a procedure.
A key reason why it is so hard to determine supply cost by procedure is clinicians simply can’t find products in the EHR when attempting to document their use on a patient. At Franciscan Missionaries of Our Lady Health System (FMOLHS), the item master was feeding product data to the clinical documentation systems. But because the item file contained only routinely used items, clinicians could only find the items they were looking for in the system about 40-50 percent of the time.
There’s been a surge of merger and acquisition (M&A) activity within the healthcare industry. During the first quarter of 2018, there were M&A deals totaling nearly $156B, the strongest start in over a decade.1, 2 While healthcare companies view mergers and acquisitions as strategic growth initiatives, how do they impact their customers – healthcare organizations – and their patients?
If you are in anyway involved in the healthcare contracting process, you know the tremendous challenge that providers, manufacturers and distributors face when attempting to manually align data for pricing accuracy. With thousands of price changes happening each day, all parties to a contract spend an enormous amount of time and money trying to keep up with them.