Healthcare organizations have traditionally worked to limit the product data held in item masters to the products used most commonly. Today, with expanded use of electronic health records, the item master is becoming more of a strategic asset and the single source of truth for item information in multiple systems. This evolution suggests that the item master may become more valuable by extending item data beyond routine stock and products.
The Office for Civil Rights (OCR) defines business associate as “a person or entity that performs certain functions or activities that involve the use or disclosure of protected health information on behalf of, or provides services to, a covered entity.” If you fall into this category, this blog post is for you.
A new year brings new beginnings. And for the Association for Healthcare Resource & Materials Management (AHRMM) that means welcoming GHX’s Karen Conway as national chair of the supply chain-focused organization, which is part of the American Hospital Association.
The GHX Best 50 is comprised of North American provider organizations that score highest in automation of transactions with their trading partners, Exchange utilization and trading partner connections during a calendar year. We recently surveyed this group of high performers to gauge their perceptions of their healthcare supply chain priorities and outcomes for 2017.
Changes in healthcare – from delivery to payment – are impacting leadership and the structure of healthcare organizations. These changes are driving the need for talent previously not seen as key components for successful healthcare organizations. As a result, leaders are beginning to include members with expertise outside of traditional roles such as social media, customer experience, marketing and change management. This shift in thinking is key to an industry experiencing a major transformation and we are seeing it play out in five key ways.
The Health Insurance Portability and Accountability Act (HIPAA) has evolved from a means to modernize information exchange in healthcare to now include Privacy, Breach Notification and Security Rules. The progression led to the initial audits of covered entities in 2011 and ultimately, to the final Omnibus Rule in 2013 which folded business associates (BAs) into the liability equation regarding data breaches. The point being that protected health information (PHI) and ePHI is the responsibility of the entire industry.
You don’t wake up one morning and just say, “I’m going to run a marathon today”. No, you have a plan to get ready. The winners of GHX Best 50 all started somewhere and developed a plan for getting where they wanted to be – on the stage receiving their award!
It would appear that Democrats and Republicans can’t agree on anything if you are listening to the conversations or sound bites. In the recent HPN article, Amidst political turmoil, value is a bipartisan standard, Karen Conway finds there is something that both parties in Washington do agree on – better quality healthcare at a lower cost, which at a high level is the definition of value.
When you consider legislation passed in recent years, the Medicare Access and CHIP Reauthorization Act (MACRA) and the 21st Century Cures Act, it is clear that there is bipartisan support for better quality care at a lower cost regardless of the battle over ACA.
Pressure continues to mount for the healthcare industry as it works to manage costs and deliver measurable improvements in the value of care delivered. The growing wealth of healthcare data, especially for medical device manufacturers, is key to relieving some of these pressures.
Both sides of the healthcare supply chain – providers and suppliers – derive value from the data they collect and report. At GHX, we believe that as the healthcare supply chain continues to mature, a fundamental shift in the critical role data plays in delivering quality patient care is also taking hold.
This week Supply & Demand Chain Executive announced the recipients of its annual “Pros to Know” award, which recognizes the industry’s top supply chain professionals. It’s my pleasure to share that not one, but two GHX executives were chosen to receive this year’s recognition: Pete Nelson and Chris Louma.
As a healthcare supply chain professional, when was the last time you strategically collaborated with your colleagues in accounts receivable (AR) or accounts payable (AP)? Think back to your last customer or vendor contract planning session - did you carefully consider fulfillment obligations around terms, such as payments – and how this would impact the financial health of your organization?
Whether you are a healthcare provider or supplier, your supply chain and finance teams put a great deal of time and effort into the negotiation, enactment, management and governance of contracts, not only with your customers and vendors but across your own organizations.
But how effective are you at both getting what you are promised and also delivering what you promised? How balanced are the puts and takes — in other words, is there enough governance in the process and is control in the right place(s) to facilitate the most balanced and mutually beneficial actions in support of agreed-upon terms?
The healthcare industry is undergoing a transformation aimed at providing higher quality, more cost-effective care. Key to striking the balance between cost and quality is data.
At GHX, we know data can help organizations set strategic direction and direct critical business and care decisions. However, this only holds true when “bad data” does not serve as the foundation for efficient and effective value analysis efforts.
For instance, healthcare providers take advantage of their supply chain data to help reduce cost and improve standardized patient care. That data, coupled with predictive analytics, helps to better anticipate future product demand — which enables providers to avoid losing speed to patient care due to discontinued or backordered products.
In healthcare we typically operate in silos, with the right hand blind to what the left hand is doing. Take for instance finance in both provider and supplier organizations. While accounting and accounts payable/collections might communicate regularly with treasury and engage in all-team meetings, their structures, business processes and policies are often disjointed. Without an integrated approach throughout its financial functions, an organization cannot fully assess its activities and identify opportunities for cost savings.
Managing business associate (BA) relationships in this era of change takes an ongoing approach. In fact, building a culture of compliance is the only way to make iterative improvements. So, does your organization demonstrate a culture of compliance through daily actions? Do you know the areas where the Office for Civil Rights (OCR) is putting the most emphasis? Does your organization understand the current definition of a business associate in the eyes of the OCR?
When it comes to payment options, the more choices the better right? Healthcare suppliers want to get paid fast, and healthcare providers want to take advantage of early pay discounts and rebates, and avoid late fees. So why not have a variety of payment methods in place: check, wire, credit card, Automated Clearing House (ACH), etc.?
But choice can add costs.
Is your business strategy based more on gut feeling or a commitment to forecasting, formulating sales plans and making decisions based on objective data points? If your business leans more toward the first category, there should be an urgency to move to a more data driven strategy. The role of big data to direct strategic decision making has been likened to the early adopters of computing, with forward thinking organizations seeing the biggest returns and the laggards spending years trying to catch up.
You have probably heard it said, “You had to be there,” meaning that the retelling of the story probably doesn’t do justice to the actual experience. There are many such instances at the GHX Supply Chain Summit where over 800 healthcare supply chain professionals gather each year for insightful and thought provoking presentations and conversations. So, while there are many experiences at the Summit that you have to “be there” for, here are some thoughts, ideas and statements heard at the 2017 Supply Chain Summit that pack a punch even in the retelling.
Mergers and acquisitions (M&As) have become the norm in our industry. Most health systems and hospitals have been, or will soon be, involved in an M&A as we move into the era of “super IDNs.” At the end of the day, none of us are going to stop this activity from occurring, so what can we do to be successful?
During a panel discussion at the 2017 Healthcare Supply Chain Summit entitled, “What provider supply chain executives should know about M&As: The Good, Bad and Ugly,” three seasoned experts in healthcare M&As shared their best practices and lessons learned -Nancy LeMaster, VP of Supply Chain Transformation at BJC HealthCare; John Berger Executive Director of Finance Shared Services at Piedmont Healthcare; and Karl Blomback, Corporate VP for Hackensack Meridian Health.
Managing contracts and compliance data is a challenge for healthcare organizations today. The process often involves people and departments across the organization requiring a secure but nimble system for tracking negotiations and approvals. Current regulations require healthcare providers to know more about who they are doing business with and to manage their vendor population with consistent scrutiny to maintain accurate data. Adding to the complexity, with mergers becoming more common, hospitals are seeing an increase in the number of local contracts along with contracts that fall outside of med-surg that need to be maintained as well. As a result, organizations need to interact with contracts in new ways, with more flexibility while maintaining even more data and security.
We held the April GHX Global Data Standards User Group Meeting on-site at the 2017 Healthcare Supply Chain Summit in National Harbor, MD on April 26, 2017. As always we had a tremendous turnout with individuals from throughout the healthcare supply chain continuum - providers, suppliers, GPOs, distributors — engaging in constructive dialogue on how to drive greater data standardization within our industry.
The threat of security breaches is no small problem in healthcare. Because of the sheer volume and variety of information contained in healthcare systems, the industry is one of the largest targets for thieves, especially for those who want to gain access to valuable protected health information (PHI).
To shield this sensitive health information, the U.S. Department of Health & Human Services (HHS) Office for Civil Rights (OCR) is increasingly assessing compliance with the HIPAA Privacy, Security, and Breach Notification Rules with an audit program. The OCR audits help ensure adherence to data protection regulations, especially as they relate to business associates (BAs), who have access to millions of patient records.
“The check is in the mail.”
When it’s time to be paid, few refrains produce more unease than this one. For healthcare suppliers working to improve receivables performance, ambiguity in payment processing is problematic. As competition intensifies and interest rates rise, the pressure on suppliers to create more predictability around payment processes is climbing sharply, according to a recent study by Institutional Investor Custom Research Lab.
The underlying things going on in your supply chain, that you just can’t see without looking at the data, are where opportunities exist to move the needle. Everything may look good on the surface — you're automated from procure to invoice and following up on exceptions, have contracts loaded, etc. — but when you look deeper you get a different picture. This is your tuning point, when you move from “Everything is great” to “Uh-oh not so great — we’ve got problems” to “I don’t know where to even begin.”
How do you get the wheels turning? Where do you direct your focus?
The European Parliament recently voted to adopt its own version of the unique device identification regulation. The deadline for compliance toward these regulations is already in motion, and similar to U.S. FDA UDI regulations, the dates for compliance will be rolled out over several years for different classes of products – three years for medical devices, five years for in vitro diagnostics (IVDs).
Suppliers want to improve receivables performance, while providers need to manage payment flow and access all available discounts and rebates. Is there a way for both sides to win?
In life, and in business, enduring relationships require a commitment to transparency and trust.
When it comes to buyers and sellers, the bond can be delicate, especially in matters of cash and working capital performance—or payment. In fact, there is no bigger priority for healthcare suppliers over the next year than improving receivables performance, according to a recent survey of 100 financial leaders at major healthcare suppliers by Institutional Investor Custom Research Lab. It is also the hardest area to influence.
How can you significantly influence your supply chain performance without the help of additional resources?
Healthcare provider organizations are tasked with this dilemma daily and the goal to go beyond just managing costs, but to actually reduce costs while improving patient outcomes. Supply chain specifically goes after this challenge with an eye toward expanding automation, using data proactively and improving contract price alignment.
Let’s face it – we are an increasingly mobile world. Smart phones and tablets are ubiquitous and there is an app for pretty much everything. The ability to perform tasks on the go means we can do what we want, when we want to do it - boosting efficiency and improving access to information. As a company that is all about making it easier and more cost-effective for healthcare providers and suppliers to do their jobs, GHX is adding mobile functionality to those solutions where customers will gain the most value and achieve the greatest impact.
In healthcare, the long-held view of a “perfect order” is one where a purchase order is processed electronically — from order to payment — without human intervention.
Achieving the perfect order hasn’t been easy. A lack of automation throughout the payment cycle created all kinds of barriers to achieving the perfect order.
At Dana Farber Cancer Institute, we had a number of processes and solutions in place for vendor management but they were disjointed and no one solution was meeting all of our needs. New suppliers were onboarded by Supply Chain, Accounts Payable (AP) and our Office of the General Counsel but only Supply Chain was performing sanction checks. Furthermore, our security department had rolled out a solution to track all non-clinical suppliers and visitors that came into our facilities, but that solution too did not have sanction check capabilities.
A group of providers joined GHX at the recent AHRMM conference for discussion about the challenges facing supply chain to deliver quality data to clinical teams and how to interface this data for charge reconciliation and billing. A growing item master, subsequent data management and maintenance, and clinician frustration were among the primary concerns discussed.
There are foundational challenges that supply chain is currently facing, specifically in the connection of item master data to the EHR. What has been considered best practice for item master/data management is now being questioned with the increased use of EHR technology. Current thinking is that in attempt to both increase accuracy in patient records and reduce missed charges, more is better. As a result, the item master is growing and imposing a significant impact on workflow, maintenance, etc.
Is it possible to stay focused on a common goal and be successful even when both parties aren’t quite seeing eye-to-eye on how to achieve the end goal?
To say there is a little tension between healthcare suppliers and providers on the matter of credentialing, may be a bit of an understatement. The current environment of compliance requirements has led to frustration on both sides, even though, all would agree that better patient safety is worth pursuing. The reality is we can’t ignore the requirements on either side, so perhaps an intermediary, a bridge, an outside resource is needed to help facilitate the activities needed by both sides to achieve the common goal.
Is a “how we’ve always done it” mindset interfering with your progress toward better invoice process efficiency?
The number of challenges coming against invoice and payment processes are many but sometimes the pain is self-inflicted – like if you are holding onto old ways of doing things just because they have been in place for a long time.
I’m often approached by CIOs who ask me about GHX transitioning 100 percent to the cloud. Most of us recognize and believe that the cloud is the future of computing, yet overseeing such a huge migration creates enormous personal and professional pressure.
The healthcare industry is notable for complex contracting process, but recent trends in payment models and the continued volume of mergers and acquisitions are bringing new challenges. Overall, these developments emphasize the need for a holistic view of healthcare and for identifying a total cost of care, which is critical for success with a bundled-payment model. These external forces are driving changes internally for supply chain earlier in the process in managing contracts.