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Smaller devices push for larger gains in point-of-care, point-of-use performance

When fictional industrialist Diet Smith introduced to Dick Tracy in his eponymous comic strip the “2-Way Wrist Radio” in 1946 and then the “2-Way Wrist TV” in 1964, he might have envisioned physicians sending prescriptions to pharmacies, radiologists reading X-ray images and supply chain managers monitoring inventory locations and tracking individual products remotely via mobile devices.

Today, more than a half-century after Smith’s futuristic inventions made the funny pages, healthcare organizations employ mobile tech for a variety of communications, electronic interactions, and tracking and tracing functions. They include identifying patients and linking those patients to the proper clinical procedures and products used on them, tracking and managing access to and usage of medical/surgical and pharmaceutical products and equipment, tracking specimens for the laboratory, and transmitting data to electronic health records and billing.

Mobile tools employed by clinicians and administrators run the gamut between hand-held computers and mobile readers, including smart phones, wrist-mounted devices and electronic eyewear that can project images and instructions via online/wi-fi-enabled chips.

In short, if mobile capabilities represent the future of healthcare interoperability, then welcome to the future. Clinical and supply chain operations continue to push the boundaries of what’s possible, leaping over broken barriers even as they face and strive to be at least one step ahead of ongoing issues with security concerns.

The point is/of use

Mobile access makes it a good time to be in healthcare business if it’s simple and seamless, according to Carl Natenstedt, CEO, Z5 Inventory Inc., Austin, TX.

“Mobile technologies, including voice, scanning and other solutions that can accompany today’s powerful mobile devices, enable great advances in healthcare supply chain,” he said. “By placing easy-to-use mobile technologies that are reliably connected to the primary operational systems like ERPs and EHRs in the hands of clinicians and support staff, we can enable the capture of real-time product usage information accurately and consistently. This data, when analyzed with modern data mining techniques can open up new opportunities for operational improvements unlocking savings previously unattainable. The key to success for new mobile solutions is ease-of-use. These solutions need to be as simple and unobtrusive to use as today’s modern social media apps. They need to run on reliable, easily integratable platforms, making them ubiquitous in the clinical setting.”

Mobile tech can fuel financial and operational opportunities in several ways, which Gregory Seiders, Director, Supply Chain, Claflin Co., Warwick, RI, categorizes as preventing losses in terms of costs or increasing revenue.

“While mobile technology can certainly aid in preventing losses, perhaps the largest opportunity is increasing revenue through capturing patient charges,” Seiders insisted. “With clinicians rightfully focused on properly completing procedures and patient care, it is little surprise that not all billable items used in a procedure are recorded on paper. Mobile technology can be used to quickly tie captured bar codes and lot numbers to patient Medical Resource Numbers (MRNs), with scanning capabilities speeding data recording and preventing common errors. The inherent benefits of speed and accuracy lead to improved efficiency, lower cost, and a chance to create an environment of continuous improvement within the supply chain.”

Mobile tech also can reduce the amount of time that clinicians spend trying to locate products they need, Freund continued.

“We have all seen the case studies that show where clinicians can spend as much as 20 percent of their day on supply chain-related activities, the most frustrating of which is trying to find the items they need,” he said. “Using mobile technology, nurses can simply scan the bar code for an item that has stocked out of a supply room. The mobile device will display all locations in the hospital or even in other hospitals within the system where that item exists and enable the nurse to execute a transfer of the item from one stocking location to another. Having this capability allows nurses to spend more time with patients and less time looking for supplies.”

For the article in its entirety:  Mobile Tech Expands To Strengthen Supply Chain Links

 

 

 

Supply chain managers are used to cost-cutting drives. When expenses rise or revenues fall, it is their job to find savings through logistics, procurement or operational efficiency. But it’s a whole different ball-game when you throw patients into the mix.

The patient-centered supply chain cannot extend lead times, procure a different product, or afford to run out of inventory. For that reason, hospitals typically see supply chain as a cost of doing business: a necessary evil weighing down profitability — but does it have to be this way?

The discussion may be found at:  Healthcare supply chains are shifting as cost pressures rise

 

The top healthcare supply chain management challenges for provider organizations include provider preference items, a lack of supply chain health IT, and invisible costs.

From gauze and paper gowns to implantable medical devices and prescription drugs, provider organizations must implement efficient healthcare supply chain management processes to cut overall costs and standardize care delivery. But for many organizations, healthcare supply chain management is not as simple as tracking how items are acquired and where they go after purchase.

A December 2015 SERMO revealed that supply chain management was the second largest expense for healthcare providers.

While only one-third of the 150 surveyed hospital leaders described their organization’s supply chain management process as “very effective,” about two-thirds strongly agreed that improving healthcare supply chain management would lower costs, boost hospital revenue, and improve care quality.

Many healthcare organizations, however, face some roadblocks with making their supply chain more efficient. Some of the top healthcare supply chain management challenges include costly provider preference items, a lack of health IT implementation for supply chain functions, and limited hidden costs transparency.

The core of healthcare supply chain spending is product cost, but healthcare organizations should be aware of invisible costs associated with the supply chain, such as distribution and inventory holding expenses. To develop a healthcare supply chain management strategy that incorporates visible and hidden costs, healthcare organizations may want to consider a Lean approach.

With falling claims reimbursement rates and performance-driven payments, improving the healthcare supply chain management process is just one way to prepare healthcare organizations for the value-based reimbursement transition.

The article in its entirety may be found at: 3 Common Supply Chain Management Challenges

From Population Health to Disaster Preparedness, Supply Chain is your Strategic Asset

Tightening budgets, power deals threatening hospitals, Amazon and MACRA — those are just the start of industry-shaping trends that came about in 2017.

Let’s take a look at the ten most important developments this year and why they matter to hospitals and health insurance companies alike.

1. Squeezed tight

Not-for-profit providers are operating on ever-thinning margins, a trend expected to continue to be foremost on finance executives’ minds for 2018.

Hospitals’ median operating margin fell from 3.4 to 2.7 percent between 2015 and 2016, a Moody’s Investors Service report said  earlier this year. Cash flows also declined.

What is growing are expenses, by 7.5 percent last year, faster than annual operating revenues of 6.6 percent, the report said.

Everything is more expensive, from labor to prescription drugs. The shift to value-based payment is risky; Medicare, with its flat and lower rates than commercial insurance, is becoming a bigger piece of the reimbursement pie as baby boomers retire; and the amount of uncompensated care is expected to increase as a result of the tax bill ending the individual mandate.

Providers are getting no help from payers, as the insurance industry moves into their territory of basic care.

2. Payer power deals compete with primary care

The most recent direct assault is Anthem’s deal to buy HealthSun, a Florida network of primary care practices that will benefit Anthem’s Medicare Advantage members.

The acquisition signals Anthem’s intent to compete with UnitedHealth’s Optum, Forbes’ Bruce Japsen said.

UnitedHealth Group has been on its own buying binge for Optum, recently paying $4.9 billion for DaVita Medical Group. Perhaps not surprisingly, Anthem’s new CEO Gail Boudreaux, is a former UnitedHealth executive.

3. Payers, pharmacists and Amazon

In December, CVS Health’s $69 billion bid to buy Aetna had analysts wondering what companies would be next to integrate prescription drugs and insurers.

The data and analytics of a combined CVS\Aetna population health business redefines the retail healthcare business and what it means to offer high quality care in a lower cost setting.

Hospitals that have extended their reach by building outpatient facilities in the remote reaches of their market may find it hard to compete against a CVS that has mini health hubs in 9,700 pharmacies on city corners in just about every major metropolitan area.

Generating even more buzz and worry is a deal that’s still in the speculation stage, that of Amazon potentially getting into the pharmacy business. Cleveland Clinic CEO Toby Cosgrove said at a recent Medical Innovation Summit in Cleveland, “We are concerned about the major forces, Amazon … coming at us in purchasing.”

Some analysts have said the CVS and Aetna deal was spurred by the possibility of an Amazon Pharmacy.

Cleveland Clinic’s Toby Cosgrove said, “Without significant consolidation on the part of providers, it’s going to put us at a disadvantage.”

4. Drugs and the supply chain

During his first public appearance before Congress after taking over as head of the Department of Health and Human Services, Alex Azar, former pharma executive, said prescription drug prices are too high.

Retail prices for 768 prescription drugs commonly used by older adults increased by an average of 6.4 percent in 2015, outpacing the general inflation rate of 0.1 percent, according to an AARP Public Policy Institute report. This is at least the 12th straight year of substantial retail price increases for prescription drugs, the report said.

Cleveland Clinic’s Toby Cosgrove said the EpiPen hike took 10 percent out of the pharmacy and led to a major cost reduction. Two drugs that have been around for 50 years increased costs by 11 percent, Cosgrove said, calling the price hikes on generics “unscrupulous, unethical and words I can’t use in a mixed audience.”

Steve Ubl, president and CEO of PhRMA put it this way: “The entire supply chainwill need to be evaluated.”

5. Healthcare policy changes

Changes in leadership at the Centers for Medicare and Medicaid Services, a cut-back on mandatory bundles, a change in direction for CMMI, the new tax law ending the individual mandate and GOP aims to tackle some entitlement programs next year, add to market uncertainty.

6. Mega-mergers continue

While the unsuccessful Anthem-Cigna and Aetna-Humana mergers were winding down by the end of the first quarter of 2017, mergers and integration continued as a way to get the efficiencies of scale needed to stay competitive.

Some of the notable not already mentioned included the alignment of Penn State Health and Highmark on a $1 billion care network; Cigna‘s acquisition of IT startup, Brighter; Walgreens partnering with NewYork-Presbyterian to offer in-store telemedicine; and Advocate and Aurora Health Care combining to create an $11 billion health system. And these are just from December.

7. Instability in the individual insurance market

President Donald Trump said after the tax reform vote that Congress has essentially repealed Obamacare. While Maine Senator Susan Collins’ explanation for why she voted for the bill in the Portland Press Herald on Wednesday said, correctly, that the bill takes no one’s insurance away, the bill does end the incentive to avoid the financial penalty to get health insurance.

Without that individual mandate, only those needing healthcare will be certain to buy coverage, hiking premiums and putting the Affordable Care Act in a death spiral.

Collins had voted for the tax plan after voting against ending the ACA on assurances that individual health insurance market stability would be addressed through reinsurance and cost-sharing reduction payments to insurers in a year-end spending bill. But without full GOP support, Collins and Senator Lamar Alexander of Tennessee said those measures will have to wait until after the first of year, when Congress considers reauthorizing the Children’s Health Insurance Program, or CHIP.

8. Cost-sharing reduction payments

Insurers in the Affordable Care Act market for 2018 lost the cost-sharing reduction payments from the federal government. But by law they’re still mandated to help pay the deductibles and out-of-pocket costs for lower-income consumers on their ACA plans.

Some insurers were able to increase their premiums to reflect the increased expense, while others were not. Do insurers remaining in the market need another reason to leave the ACA business?

9. Physician shortages

Healthcare executives are facing a physician shortage due to an aging physician population and that of the general population. It’s not that young people no longer want to become physicians, but there’s a lack of residency slots.

Efficiencies include making sure physicians have a full appointment schedules, but those doctors in high demand are commanding ever-increasing salaries.

10. MACRA

MIPS and APMS are challenges providers and physicians have only started to get a handle on with the 2017 reporting period that will count towards payment in 2019.

As more providers aim for advanced alternative payment models to get better financial results, hospital executives will be planning for more change to their business model to reflect value-based care.

Original Link: 10 Top 2017 Healthcare Finance Trends

Rising labor costs, supply chain fluctuations, changes in payer mix, and regulatory changes, among other issues, are pressuring many hospitals and health systems to reduce costs and increase revenue. Indeed, the 2017 Deloitte Survey of US Health System CEOs found that declining margins is one of the top issues keeping chief executives up at night.¹

Current and projected margin challenges are considerable: Commercial health insurance payments as a percentage of hospital and health systems’ total payments are projected to drop from 37 percent to 33 percent by 2024.² The percentage of revenue from historically lower-margin Medicare payments is projected to increase from 35 percent to 40 percent of total payments.³ Labor costs are anticipated to continue rising due, in part, to patient volume growth from an aging and more chronically ill US population.⁴ Some future-state scenarios show that the combination of these trends could significantly reduce margins. A recent study from the Congressional Budget Office (CBO), for instance, suggests that absent productivity growth, between 51 percent and 60 percent of hospitals could have negative margins by 2025.⁵

To stay afloat—even thrive—in the face of margin pressures, health systems should consider identifying strategies to enhance revenue, reduce costs, and generally improve efficiency. New approaches such as using predictive analytics and Artificial Intelligence (AI) to improve the supply chain or robots and cognitive automation to enhance finance and revenue cycle processes have the potential to bend the cost curve and boost revenue in coming years.

To read the full report on how innovative technologies can improve hospital financial performance, download: The uncertain road ahead: Could technology offer hospitals relief from increasing margin pressures?

When hospitals start to dig into how their organizations can reduce healthcare costs without lowering care quality, many run the risk of overlooking several cost-cutting opportunities in their healthcare supply chain management process. But developing a more strategic supply chain management approach can help providers optimize more than simply their stock room procedures.

Healthcare supply chain management is the second largest expense for most providers after reimbursement management, according to a 2015 survey from SERMO Intelligence. While a mere one-third of providers described their hospital’s supply chain process as very effective, about two-thirds reported that improving the process would lead to lower overall healthcare costs, boosts in revenue, and better care quality.

A 110-bed community hospital in North Carolina recently recognized the need to improve supply chain management to reduce costs. By implementing lean management strategies the hospital saved $2.62 million in just five months by consolidating and eliminating excess supplies.

The lean management approach to supply chain also helped the hospital — now doing business under the name of Caldwell UNC Healthcare — to identify $421,000 in savings related to distribution costs as well as $366,000 associated with the amount of resources clinicians used managing supplies.

Establishing a more strategic rather than transaction-based approach to healthcare supply chain management was key to generating healthcare savings, Caldwell UNC Healthcare CEO Laura Easton told RevCycleIntelligence.com. Using the help of a consulting firm in 2014, Easton learned how moving beyond the traditional supply chain strategy would help improve the hospital’s overall performance and benefit patients.

“That was the basis on my introduction as the CEO into saying ‘Hey, the supply chain is a really important value stream,’” said Easton. “It is a stream of work in our organization that creates value for us and for our patients. I have an obligation as the CEO to delve into how are we performing as a small community hospital and what do we need to do to transform and to change.”

Although not well versed in the supply chain when Caldwell Memorial Hospital started their supply chain optimization project, Easton said that the hospital’s first step was identifying the major challenges across the supply chain areas.

“From an operational point of view, we really had to look at six areas — how we source products, how we contract to purchase products, how we manage the products that we buy, how we manage the suppliers who deliver those products, how we manage our inventory, and how we manage the productivity of our employees operationally,” Easton explained. “So that is where we started to look and we did a self-assessment as to what our biggest challenges were.”

Looking forward, Easton plans on further educating hospital providers on using the “most effective product for the circumstance at the best value.” She also intends to tackle other areas of the supply chain management to drive down healthcare costs.

Original Link: https://revcycleintelligence.com/news/how-a-small-hospital-developed-lean-supply-chain-management

 

The debate over the future of the Affordable Care Act (ACA) and the ongoing transition from fee-for-service to value-based care suggest a healthcare system full of uncertainty for American hospitals. Hospital executives who were already operating under severe budget constraints will be asked to do even more with less. This moment of great change for healthcare portends an expanded role for an often-unheralded supply chain player: the group purchasing organization.

The core mission of the GPO remains cost-savings – GPOs aggregate the purchasing power of providers to secure discounts and help procure the best products and services at the best value. A 2014 American Hospital Association (AHA) survey of hospital executives found that 90 percent of respondents were satisfied with the ability of their GPO to deliver cost savings, and an economic analysis of GPO operations prepared for the Healthcare Supply Chain Association (HSCA) estimated that GPOs save the healthcare system up to $55 billion annually.

Many providers, including some small and rural hospitals, lack the purchasing volume to obtain discounts on their own for specialized equipment and critical medical devices such as implants and diagnostic equipment. For these providers, the savings delivered by GPOs are particularly critical and will be even more so in the face of ongoing reimbursement challenges.

As hospitals face near total uncertainty over what will happen to the Affordable Care Act, and with Medicaid expansion, Medicare reimbursement, and a range of other challenging issues, hospital executives are assessing their vulnerabilities and trying to figure out how to best prepare for all contingencies. One of the first calls should be to their GPO.

Original Link: https://www.hpnonline.com/amid-healthcare-uncertainty-hospitals-will-lean-even-more-on-their-gpos/

The Cost, Quality, and Outcomes (CQO) Movement within healthcare is the recognition that cost, while important, is only one of many components that need to be considered by supply chain professionals. Quality of patient care, patient experience, and financial and reimbursement outcomes are also vital components that support value-for-service models.

The Association for Healthcare Resource & Materials Management (AHRMM) of the American Hospital Association convened a diverse group of healthcare leaders from across the nation at its 3rd annual CQO Summit to discuss the supply chain’s most important challenges and opportunities. The CQO Summit presentations and roundtable and panel discussions were recapped in the white paper, which is available on the AHRMM website. The following is a brief summary of the white paper.

• • Data transparency and reliability are imperatives to healthcare success.

• • The measurement and the ability to benchmark progress, which is also dependent on data.

• • Supply chain’s unique position and the opportunity it presents; a core role for supply chain is that of conduit or liaison across the continuum of care.

• • As the delivery system extends its reach to post-acute care and population health, supply chain needs to participate and understand how external resources and capabilities can be leveraged to advantage system integration.

• • To succeed in the role as liaison across the continuum requires inclusiveness and skilled communications. Supply chain must able to engage and align stakeholders across all points of care.

• Quality must be established as a core mission that drives clinical, operational, and financial outcomes.

The white paper may be found at: http://www.ahrmm.org/knowledge-center/resources/white-papers/ahrmm16-cqo-summit-white-paper?utm_source=mh-sponsored-content-posting&utm_medium=web&utm_campaign=ahrmm16-cqo-summit-white-paper&utm_content=122016

Seven capital equipment experts share actionable and reliable strategies for capital equipment contracting.

Be informed: Contracts are a good starting place. However, it is important to have a strong leverage point for negotiation, with aggregation and pricing knowledge, as equipment lends itself to a transactional approach. Benchmarking is absolutely critical to understanding the competitive marketplace, but it is also important to exhaust all resources and collaborate with all stakeholders.
Be prepared: Providing Supply Chain professionals with the right applications, services and tools is the best defense against these challenges. Deploy technology to empower the purchasing team with real-time market data at their fingertips to drive decisions. Also, it is helpful to create a five-year replacement plan that allows a team to properly forecast equipment needed, allowing staff to aggregate purchases and bring maximum volume to the negotiation table.
Be ready: Make sure the team can easily benchmark the competitive quotes against the hospital’s own historic data and allow access to market pricing driven through the collective transparency of other health systems. The resources, services and applications deployed to empower the supply chain team should be intuitive and responsive, while allowing for time to work with key stakeholders in the hospital to negotiate with confidence. Successful execution of these strategies will give the supply chain the ability to drive savings and maximize value.
Have a plan in place that you and the organization know, understand and most importantly, support. It’s understood that there are occasions when an unplanned situation dictates that the general rule of thumb can’t apply. However, even in those situations, know the must-haves that are critical to protecting the organization while delivering the best product at the best price.
Educate your customers. Help them help you. Understanding their needs while explaining and helping them understand your needs creates a strong relationship. Walk in their shoes so that you understand their pain points when they don’t have the equipment to support their patients, or equipment that is aged and forces their staff to work harder, not smarter. They are our purpose for existing in the first place. It is our responsibility to support them with what they need, when they need it and at a price the organization can affort as they strive to provide positive outcomes for the patient.
Know your limits and don’t be afraid to ask for help. Capital purchasing — either for a project or a “one off” purchase” — isn’t easy. It requires communication, collaboration, coordination with the team and confidence in the team. So whether you’re a capital “acquisitions” expert or a combined capital acquisitions/equipment planner expert, you can’t do it alone. Being surrounded/supported with your team of experts is crucial to your success. It’s not always easy to share, but if you are really committed to successful outcomes, then being part of a team is the best thing you have going for you.
Celebrate your successes and learn from your defeats: Evaluate both situations. What did you do right to achieve the success and conversely, what happened that didn’t allow you to realize the outcomes you were looking for? There will be times when you’re just not going to be able to squeeze that last dollar out of the contract, or get that extended warranty or get that extra widget. Don’t take it as a loss, but as a lesson. Determine how you achieved the positives of what you’ve achieved and how you can apply those to the next opportunity that presents itself.
At the end of the day, share with your fellow Supply Chain professionals. Don’t operate in a silo. Let them hear how you’re challenged in doing your job. They could be experiencing the same things — albeit in different ways — you are. In spite of the fact that we don’t like to share that we may be struggling with a particular situation — or person — by sharing we might get feedback that helps us overcome those hurdles in a less painful way. Your struggles may be something they are experiencing — or have experienced — and their insight from a different perspective may help you. In the same way, sharing your successes, may be just what “the doctor ordered” to help them overcome some of the same headaches they have.

Ric Goodhue, Equipment Planner/Capital Coordinator, CaroMont Health, Gastonia, NC

Centralization of Capital Planning and Procurement is essential to driving standardization and efficiency in managing resources and utilization across the enterprise. Investing in resources and technology for capital management can deliver huge wins in effectively managing capital improvements.
Organizations must make the investments necessary to effectively control and direct capital planning and acquisitions. These Investments include people, technology and processes that are focused on ensuring that needs are addressed in a systematic manner while still being reactive to the requests in hand.
Conducting an organized asset inventory and then pairing that with condition indexes and utilization information will allow you to flip the capital planning model on its head and begin to push out capital budgets based on equipment age, condition and technology obsolescence rather than just buying the latest and greatest model on the market.

Allen Archer, CMRP, Director, System Supply Chain Management, Houston Healthcare, Warner Robins, GA.

Plan ahead to ensure end-users and equipment planners provide equipment recommendations early in the process. Start negotiating equipment purchases well before the design is complete. Doing this will save both time and costs with the project.
Ensure the project team reviews the final proposal along with the terms and conditions to avoid unforeseen costs and budget overruns.
Complete a full analysis of operational costs, service contracts, and consumables for each vendor’s equipment prior to selecting the vendor and equipment.
Some capital equipment is “permanent” and comes at a great expense to purchase and install. When making a 15-year equipment ownership decision, look to many sources for information as inputs to the vendor selection decision. Avoid the route of allowing one end-user the power to select a vendor when they may not be at the hospital next year or even see the project to completion.

Steve Sutton, Director, Planning and Design Group, Belimed Inc., North Charleston, SC

Always try to take into account all costs when negotiating equipment contracts.
Look for an equipment distributor to contract with that can help you consolidate the purchasing of those distributor-bought items and smaller manufacturers.
Analyze your service contracts periodically to make sure costs are in line.

Cindy Juhas, Chief Strategy Officer, CME, Warwick, RI

Find a simple way to learn about new and innovative equipment suppliers. This is a fragmented part of the healthcare supply chain. Use a simple market share tool from OpenMarkets to start.
Use data. Ideally, a Supply Chain professional will have access to organizations’ entire capital budget. Use this data to find opportunities to partner with suppliers across departments and timeframes. This saves time and money for all parties involved.
Automate your capital budgeting and requisitioning process. If your organization is one of the [approximately] 40 percent still doing equipment planning via email, pen and paper — find a modern Supply Chain-specific platform to support a more efficient workflow.
Join OpenMarkets! There’s no cost and it’s a simple way for providers to more collaboratively work with suppliers.

Tom Derrick, Senior Vice President and Co-Founder, OpenMarkets LLC, Chicago

Insist that software updates/corrections be at no cost and that software upgrades be offered at best pricing options.
Know the market for potential sources and pricing trends.
Distill marketing verbiage to get to the facts straight.
Become familiar with clinical practice trends and standards.
When appropriate, ensure coordination with clinical engineering, the IS/IT community, facility operations/construction, strategic planning.

Jeffrey Dunkle, Sourcing Manager, Capital, BJC HealthCare, St. Louis

Original Link – https://www.hpnonline.com/27-tips/