Case for Standards|
Enormous cost pressures
are assailing the U.S. healthcare industry
and promise to continue for the foreseeable
future. Many factors beyond our control —
unprecedented volatility in energy and raw
materials costs, inadequate reimbursement
and an increasingly complex regulatory environment
— are challenging the ability of hospitals
and medical technology companies to provide
the patients we serve with innovative, high-quality
healthcare. Combine them with the significant
waste and inefficiency caused by bad product
data and a compromised supply chain and you
have an allegorical perfect storm that threatens
the financial well being of all industry stakeholders.
Today, hospitals spend countless hours
and resources manually gathering, scrubbing and
modifying product data to populate procurement systems,
electronic health records and clinical systems.
These error-prone processes involve inputs from
many supply chain participants, including group
purchasing organizations, distributors and suppliers.
The root cause of many pricing, delivery and chargeback
errors that exist today is a lack of common product
data standards and a system to synchronize this
information up and down the supply chain.
Yet, behind every storm cloud lies a
silver lining. Now, more than ever before, momentum
is building for supply chain data standards that
can help eliminate waste and inefficiency, which
cost the industry billions of dollars each year.
Over the last 18 months, the U.S. healthcare industry
has made tremendous strides in testing the applicability
and scalability of product data standards that are
successfully being used by other large industries
to manage supply chain processes. The results are
It now appears that hospitals and some
suppliers, including BD, are rallying behind a single
set of standards that we can use to drive down costs,
create efficiencies and, ultimately, improve patient
safety. These standards from GS1 are sometimes referred
to as the "3Gs": the GLN (Global Location Number),
the GTIN (Global Trade Item Number) and GDSN (Global
Data Synchronization Network).
Realizing the benefits
The ability to move medical products
accurately and efficiently through the supply chain
is critical. With common, synchronized product data
standards, we can help get the right product to
the right patient at the right time with the right
price and right information electronically (without
human intervention) on the first attempt. Instead
of a Perfect Storm, the "Perfect Order" can become
a reality in our industry. As we have heard from
our customers on the forefront of product data synchronization,
bar-coded products and point-of-care scanning assist
them with important patient safety initiatives by
tracking products, recording serial numbers and
managing expiration dates.
Although suppliers generally have clean
product information in their ERP systems, current
manual processes, coupled with the lack of product
data standards, cause data moving through the supply
chain to be misinterpreted and corrupted. This leads
to hiring costly staff to manage non-value added
re-work processes. In extreme cases, bad product
data could cause questions or errors regarding latex,
sterility, product reuse and other important clinical
Perfect, synchronized product data through
data standards and GDSN are invaluable for Electronic
Health Records and other clinical systems. It also
helps providers ensure they are speaking the same
language as their suppliers, and also between departments
in the same hospital. For suppliers like BD, product
data synchronization can enhance efficiency by eliminating
redundant efforts to share product information across
multiple customers, using separate and unique lists
of data elements and formats. Accurate product data
also create the foundation for accurate e-commerce
and supply chain efficiency.
Common standards for the common
To be successful, all healthcare supply
chain stakeholders must adopt a common set of data
standards in a system that synchronizes supply chain
information across the board. Many healthcare suppliers,
including BD, already use GS1 Standards for product
bar codes today. Likewise, BD and others are using
GDSN as a single location for product information
to support customers in other markets.
As global healthcare suppliers know,
product numbering requirements are growing around
the world. It is imperative that the market harmonize
data standards to support the global market, rather
than pursuing country-specific numbering systems
and bar code requirements. Suppliers should adopt
a common worldwide product numbering system, with
the GTIN emerging as the system of choice.
Hospitals must not only adopt these standards,
but also encourage their suppliers to do the same.
Many facilities are already taking a stand by mandating
the incorporation of specific GS1 Standards by 2010
and 2012. BD has received letters from several leading
healthcare institutions indicating their intent
to adopt these standards. Many healthcare providers
are beginning to utilize data standards by participating
in industry pilot programs. This kind of leadership
is needed to effect change in an industry that,
until recently, has been resistant to it.
Influential industry groups, such as
the Strategic Marketplace Initiative (SMI), the
Association for Healthcare Resource and Materials
Management (AHRMM) and the Healthcare Supply Chain
Standards Coalition (now part of GS1 Healthcare
US), support the 3Gs to meet specific healthcare
supply chain needs. Group purchasing organizations
– Amerinet, Premier and Resource Optimization &
Innovation — are making GS1 adoption a contract
requirement for healthcare suppliers and hospitals
alike. GHX recently announced its plans to become
a GDSN-certified Data Pool.
Take charge, take action
You need only take a trip to Target or
Home Depot, where scanning a bar code is a given,
to begin to imagine the possibilities that data
standards could bring to healthcare. Returning a
product without a receipt is done in a blink of
an eye, and there are no mysteries in finding needed
information to complete a transaction.
As the buyer of products, Materials Managers
have the power to encourage adoption of the 3Gs.
Please join the standards movement now. Arm yourself
with information about the benefits of product data
synchronization to garner executive support and
convince your supply chain partners to improve their
business processes (www.standards.ahrmm.org).
You should encourage suppliers to assess
their state of readiness for using GS1 Standards
by sending letters communicating your specific implementation
dates and plans. Likewise, ask your GPO what it
is doing and how you can help move the process along.
Finally, encourage your suppliers to join ongoing
tests of GS1 standards, including the U.S. Department
of Defense GDSN pilot. Most importantly, take personal
responsibility – begin using the standards.
While many of the pressures we face seem
to be beyond our control, establishing product data
standards for the healthcare industry is completely
in our hands. Collaboratively we can improve the
quality of patient care and our bottom line at the
same time. We cannot afford to wait any longer.
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