What You Should Know:

• Three years after COVID-19 was declared a public health emergency, many healthcare supply chain leaders and frontline professionals are operating in survival mode, according to new industry research from Deloitte Consulting LLP.
• Ongoing challenges include economic pressures, multiple resource shortages, data visibility and labor issues.

Key Findings

To gain greater insight into these impacts, Deloitte expanded its study by conducting site visits to healthcare facilities, interviewing frontline professionals and re-interviewing supply chain leaders in private and public sectors across government, healthcare, academic institutions, and humanitarian non-governmental organizations (NGOs) from November 2022 to March 2023.

Key findings include:

• 70% of interviewees cited data visibility as a concern.
• 73% of those interviewed indicated that disruption is the expectation, impacting their ability to focus on strategic initiatives, such as health equity.
• 60% of post-pandemic interviewees believe that healthcare supply chain will remain a focus for their organizations.

3 Recommendations to Increase Healthcare Supply Chain Resilience

To increase healthcare supply chain resilience and enable healthcare organizations to focus more on implementing long-term strategic initiatives, Deloitte recommends:

1. Developing a robust risk management framework and continuously monitoring supply networks to prepare for possible disruptions.
2. Focusing first on supplier relationship management for critical products.
3. Leveraging a Human-Centered Design approach to identify opportunities for improvement.

Through years of disruption and advancement, the retail industry has evolved tremendously to meet the increased demands of a broadening consumer base. However not every industry – and most notably healthcare — has progressed with the times and buyers’ needs.

The healthcare supply chain specifically must expand beyond its antiquated roots to better serve buyers. Just as in retail, where the U.S. has seen exponential growth over the last 20 years, according to the U.S. Census Bureau, the healthcare supply chain must, too, adopt a new model. A model with technology integration has been tested in retail to show improved efficiencies and experience for buyers.

Below are a few key lessons from the retail industry that healthcare supply chain leaders need to adopt in order to move their model forward: 

1. A Better Customer Experience

The retail space has grown exponentially through the number of brands and products on the shelf compared to 20 years ago and through the advent of Amazon. The buying process has become consumer-driven, rather than through in-person ordering with a salesman. Consumers are more inclined to choose a simplified shopping encounter like that of the Apple App Store, which has created an instantaneous, click-of-a-button shopping experience. This innovation has provided significantly more convenience and set new customer expectations. 

Healthcare companies can follow suit to reduce friction in a similar way, meeting the demand of an emerging spectrum of customers – from hospitals to individual patients – for an increasingly automated purchasing environment.

2. Automation and Cost Savings

The retail industry has redefined the shopping experience through artificial intelligence and warehouse automation, making it a prime example for what other industries can implement to drive better customer interactions. 

The healthcare supply chain, on the other hand, has been widely left out of digital transformation. By taking a more modern and flexible approach, it can improve the buying process through incorporating technology pioneered outside of healthcare.

With technology and economies of scale, prices for goods can be driven down. Those cost savings can be passed along to the customer and invested into the company to further implement technology. 

3. Price Transparency and Data Tracing

Tools that allow price transparency and data tracing create peace of mind for both the customer and organization. Large online retail marketplaces provide an easy example of structured ordering and tracking. This model creates trust and provides on-demand purchase details, along with shipment tracking information. The healthcare industry has an opportunity to take those lessons and apply them – particularly when it comes to the purchasing of medical supplies Examples like UberEats, with its well-established processes, allow for swift delivery and accessible tracking and customer services.

Buyers from the healthcare market don’t have access to the same receipt details or order history, as the process still widely involves third-party catalog shopping. This results in extra red tape, requiring buyers to contact customer support for issues that could be automated.

Incorporating consistency and transparency into the healthcare supply system will improve the purchase experience while reducing customer service costs. 

4. Commercialization and Digitization 

The retail industry created an incredibly successful model for online purchasing and engagement. The healthcare supply chain lacks that kind of proven system. 

For an example, look at vaccine patents. When vaccines (or any drug for that matter) are accessible to the public market, it allows for many companies to bring the not-so-secret formula to life, empowering commercialization. With more competition, and a better backbone of a system, the price for the vaccine or drug plummets.

Envision a future where all healthcare supplies are accessible in online marketplaces — no more needless time wasted flipping through catalogs. Through commercialization and the digitization of systems, buyers can find everything they need online.

The retail industry has undergone seismic shifts to meet changing demand. The days of department store browsing have long been in decline, as evidenced by a decrease in revenue from brick-and-mortar stores. To meet this challenge, the integration of technology has vastly improved the consumer experience. As the Amazon model illustrates, consumers’ demands and urge to shop remains, but there is a need to shift that experience.

To advance, it’s essential that the healthcare marketplace remains adaptable to meet the demands of the consumer experience and be a part of the online marketplace revolution. Leveraging the lessons from the retail industry, healthcare marketplaces can improve the buyer experience. This will enhance care and reduce spending costs across health verticals. 

About JT Garwood

JT Garwood is the CEO and Co-founder of bttn, a Seattle-based technology company transforming medical supply chain distribution through e-commerce and digital solutions. Garwood is a two-time marketplace founder, angel investor and active advisor to U.S. startups.

What You Should Know:

– GHX Lumere announced the launch of its consulting service to support healthcare providers that want to optimize savings and reduce clinical variation.

– This premium service combines clinical expertise, data, evidence and technology to help hospitals and health systems improve supply chain performance. 

Lumere Consulting Services Offering

As hospital operating margins continue to lag, many organizations are looking to achieve savings through clinically integrated strategic sourcing projects. Lumere’s Consulting Services help to alleviate capacity constraints caused by ongoing staffing shortages and accelerate speed to value by providing supply chain teams with dedicated project management support. Lumere’s team of experienced consultants help project stakeholders develop evidence-based sourcing and utilization goals and then work with physicians to gain alignment on these cost-reduction strategies. This work, done on-site, virtually or in a hybrid capacity, supports the creation of a repeatable framework enabling health systems to implement and scale future cost-saving initiatives without the need for additional consulting support. 

The consulting services include: 

– Strategic Clinical Sourcing Consulting: Focused on managing clinically intensive strategic sourcing and utilization projects for physician preference item (PPI) categories, such as orthopedics and cardiovascular service lines. 

– Value Analysis Governance: Focused on developing industry-standard clinical value analysis programs by helping organizations determine the policies they need in place, what team members should be involved and how to go beyond the supply chain department to create a true culture of evidence-based value analysis system-wide. 

What You Should Know:

– UPS Healthcare today announced it is enhancing its specialty pharmaceutical offerings by establishing UPS Cold Chain Solutions, a comprehensive suite of cold chain technologies, best-in-class capabilities to support healthcare customers. 

– UPS Cold Chain Solutions is purpose-built to provide pharmaceutical companies, healthcare providers and laboratories a full, end-to-end cold chain service offering, including storage and distribution, transportation, visibility, and quality assurance capabilities to meet their complex demands for critical products around the world.

Why It Matters

Chronic and life-threatening diseases, including cancers, respiratory, autoimmune and cardiovascular conditions, are the fastest growing disease categories in the world, creating a rapid acceleration in the development of biologically derived, temperature-controlled drugs and therapies. According to the Biopharma Cold Chain Sourcebook, cold chain trends show 48 percent growth between 2018 and 2024 for drugs that require at least 2 to 8 degrees Celsius storage and shipping. Additionally, the overall market for cold chain services (packaging, transportation and data services) is expected to significantly accelerate growth over the next three years, growing by 24 percent by 2024, after posting a 10 percent increase from 2019 to 2020.

 UPS Cold Chain Solution Capabilities

UPS Cold Chain Solutions is part of an aggressive strategy for UPS Healthcare to expand its offerings and capabilities, including: 

·       Powerful temperature-controlled storage capacities 

·       Storage and package customization for customers 

·       UPS European Cold Chain Ground Network expansion – ground fleets, dedicated experts on-site, etc.   

·       Transportation efficiencies through unique delivery options 

·       Precise monitoring with UPS® Premier technology 

·       The construction of new GDP-compliant, healthcare-licensed distribution (HLD) facilities, as well expansions and cold chain retrofit projects to existing facilities  

“Our customers have been taking advantage of our cold chain capabilities for years, but the pandemic caused UPS to move even faster to enhance an integrated set of cold chain solutions to support the future of the pharmaceutical and medical device industry,” said Wes Wheeler, UPS Healthcare president. “UPS’s near-perfect, on-time delivery of the COVID-19 vaccine proves how effectively and efficiently our network handles biologically derived drugs, even at extreme temperatures.”

“UPS sets a high bar for excellence in cold chain delivery and logistics, and these current and future investments in innovative solutions will ensure we keep pushing the bar higher,” Wheeler said. “For our customers, we will remain focused on delivering on our commitment to ‘Quality Focused. Patient Driven.’”

What You Should Know:

– IBM has launched Rapid Supplier Connect, a blockchain-based solution to help battle medical supply chain shortages due to COVID-19. 
 
– The network will help government agencies and healthcare organizations identify new, non-traditional suppliers who have pivoted to address the shortage of equipment, devices, and supplies needed for COVID-19 relief efforts. 

– Rapid Supplier Connect is available at no cost until August 31, 2020, to qualified buyers and suppliers in the US and Canada. 

As part of IBM’s approach to combating COVID-19 with technology solutions that enable more trustworthy information, accelerated discovery, resiliency, and adaptation, the company today announced IBM Rapid Supplier Connect, a blockchain-based network designed to help government agencies and healthcare organizations identify new, non-traditional suppliers who have pivoted to address the shortage of equipment, devices, and supplies needed for COVID-19 relief efforts.

Availability/Cost

Rapid Supplier Connect is available at no cost until August 31, 2020, to qualified buyers and suppliers in the United States and Canada. Suppliers and buyers currently joining the network include hospitals and other organizations such as Northwell Health, New York’s largest healthcare provider, and The Worldwide Supply Chain Federation, which is onboarding more than 200 American suppliers from its 3,000 global community members. 

IBM Rapid Supplier Connect Features & Benefits

With healthcare workers and other first responders feeling the impact of supply chains disrupted by unprecedented challenges, many large and small businesses from outside the traditional healthcare procurement system are reconfiguring to mass-produce masks, gowns, and other essential supplies. In order to begin purchasing from them at scale, buyers—including hospitals, state procurement divisions, pharmacies, and others — need help identifying these new suppliers, efficiently vetting and on-boarding them, and understanding their real-time inventory availability. The network also helps identify existing supplies and excess inventory going unused, allowing hospitals to make it available to others and redirect supplies where they are needed most.

Buyers who access the network can benefit from a broader range of suppliers outside of their traditional supply chain, a streamlined supplier onboarding process, validation checks, and inventory information in near-real-time. Suppliers benefit from a portable online identity, access to user feedback, and the ability to post and manage inventory availability. Real-time insight into a volatile and uncertain supply chain is never simple, and with the challenges of the current global situation, IBM harnessed the Trust Your Supplier blockchain-based identity platform built by Chainyard for qualification and identification, in conjunction with its existing Sterling Supply Chain Suite and highly scalable Inventory Visibility microservice to deliver this increased visibility. 

Rapid Supplier Connect complements existing supply chain networks and their payment systems, however, buyers also have the option to use the services of a third-party paymaster for a fee, CDAX, which will secure funds on behalf of buyers in a custody and settlement account, holding goods ordered contractually from the supplier under a consignment arrangement until the buyer verifies acceptance of the order and releases funds to the seller. Project N95, which is serving as a clearinghouse for information on COVID-related suppliers will also help with supplier vetting. Dun & Bradstreet is contributing its identity resolution, firmographic data, and supplier risk and viability scores, and KYC SiteScan will provide “Know Your Business” due diligence report access. 

How to Join The Network

Joining the network is expected to take buyers and suppliers approximately 30 minutes, with industry and technical support provided by IBM’s operational support center to assist with onboarding and getting value from the network. 

Chances are good the face mask you’re wearing or have on hand (just in case) was made outside the United States, maybe in China.

In calmer times, that wouldn’t matter much. But when Chinese officials are trying to stem a global pandemic that started in a Chinese city, how likely is it that the country will continue to export face masks at the same rate?

This isn’t a hypothetical. With the spread of COVID-19, aka, coronavirus, we know the answer is not very, and that it impacts a great deal more than face masks.

This moment might be one of opportunity for Mike Bowen, executive vice president for one of the few companies that manufactures masks in the U.S., were it not for the overwhelming numbers—for the chasm that exists between supply and demand.

“I’ve got requests for maybe a billion and a half masks, if you add it up,” Bowen says, adding that since January he is averaging around 100 calls and emails a day. “Normally, I don’t get any.”

Of course, the challenge illustrated by Bowen’s predicament is far more expansive than the inability of one Texas-based manufacturer to keep up with a ridiculous, panic-driven spike in demand.

“Without secure supply chains, the risk to health care workers around the world is real,” said Dr. Tedros Adhanom Ghebreyesus, director-general of the World Health Organization. “Industry and governments must act quickly to boost supply, ease export restrictions and put measures in place to stop speculation and hoarding.”

And in the meantime, what can an individual hospital or health system do to try and ensure adequate supplies?

Focus on things at home. Keep it local. At a minimum, implement real-time supply chain management systems that provide timely, accurate reports so you know what you have and need.

How can a robust supply-chain management system help you in times like these?

First, by managing items across supply chain methodologies. Certainly, your hospital orders from different suppliers, and chances are those suppliers don’t all use the same methodology. With cross-stock methodology capabilities, it won’t matter whether suppliers use KANBAN, EOQ/ROP, PAR, MIN/MAX or Suppress Pick.

When the system can search without concern for methodology compatibility, your hospital can have more faith in the accuracy of current inventory, will save time previously spent contacting individual suppliers, and can more rapidly resupply as needed by quickly determining who has what and where. Need to replenish hand sanitizer and cotton swabs? Initiate one search that pulls in all existing suppliers and tells you who has what you need before placing an order.

Second, by tracking the supply of an item for both primary and secondary suppliers. As COVID-19 demonstrates, this ability to manage backorder situations is always useful and sometimes crucial. A useful, vibrant system will use a barcode to add an item to a primary provider pick list AND report on the same item to a secondary provider in the event the primary has none in stock. The need for guess work and manually retracing steps when the primary provider does not have the necessary stock is eliminated.

Finally, by comprehensively managing all items not controlled by the Drug Enforcement Administration. Controlled substances that fall under DEA jurisdiction are a complicating factor, but the system you use should monitor everything but controlled substances. Is your hospital having to manually track and order some essential items? Time to look for a new system.

Beyond these common-sense steps enabled by a functional supply-chain solution, hospital administrators may want to start looking for alternative suppliers. The disturbing truth is that the United States has become heavily reliant on China for certain products that slow to a trickle in situations like the one COVID-19 is creating.

“This is an opportunity for companies to look for different ways to do the supply chain,” said Stephanie Kennan of McGuireWoods Consulting. “I think it’s an issue that over the long term we need to grapple with because we can’t even manufacture a lot of the drugs inside the United States.”

And where China is the source of many drug-related components, India produces many of the finished drugs imported to the United States. With COVID-19, the Indian government has instructed manufacturers to get permission before exporting 26 different drugs, about two-thirds of which are antibiotics.

So, will COVID-19 be the catalyst for a whole new era of manufacturing essential products inside the United States? Perhaps it will be, and perhaps it should be. And perhaps your hospital can find a way to contribute to or benefit from such efforts.

In the meantime, however, the best thing you can do for your organization and patients is to stock up on necessary items as efficiently and rapidly as possible. With any luck, COVID-19 will be a tremendously exaggerated threat, but it will most certainly be followed eventually by a bug that is not. The key element is our preparation for threats generally, not the lethality of this threat in particular.

Irv Lichtenwald is president and CEO of  Medsphere Systems Corporation, the solution provider for the CareVue electronic health record.

– Global Healthcare Exchange (GHX) announced it has acquired Chicago-based Lumere, a provider of evidence-based data and analytics solutions that enable healthcare organizations to build clinically integrated supply chains and optimize medication formulary management. 

– As reimbursement models move from fee-for-service to fee-for-value, GHX believes Lumere’s capabilities will extend its value to more directly improve patient outcomes at the lowest cost by empowering customers to make evidence-based purchasing and utilization decisions. 

Global Healthcare Exchange (GHX) today announced it has acquired Chicago-based Lumere, a provider of evidence-based data and analytics solutions that enable healthcare organizations to build clinically integrated supply chains and optimize medication formulary management. Financial terms of the deal were not disclosed. Key Lumere leaders, including CEO Hani Elias, CTO Will Danford and President/Chief Strategy Officer Eric Meizlish will remain with the combined organization.

Driving Healthcare’s Clinically Integrated Supply Chains

Founded in 2012, Lumere (formerly Procured Health) is an organization comprised of clinicians, researchers, software engineers and strategic advisors focused on helping health systems eliminate unwarranted clinical variation and cut unnecessary costs—specifically related to device and drug selection and utilization. By providing both physicians and hospital leaders with evidence-based data, information and analytics they’ve previously lacked, Lumere accelerates their ability to optimize patient care and decrease healthcare’s financial burden.

Lumere has emerged as the industry-leading source of technology solutions that drive evidence-based device and drug utilization and purchasing decisions. Spend on medical products and drugs represents one of the fastest-growing expenses for US health systems. The combination of Lumere’s capabilities with GHX’s unmatched network of providers and suppliers will enable the industry standard for device and drug intelligence needed to optimize patient value.

“Together, GHX and Lumere will provide an unmatched source of information that enables health systems to align purchasing and utilization decisions with evidence,” added Hani Elias, CEO at Lumere. “Our combined companies will help healthcare stakeholders deliver care that’s backed by data and guided by evidence, allowing drug and device expenditures to be supported not just by price but by clinical outcomes. Shining a light on outcomes will provide clinicians and hospital administrators with the information they need to help make the best decisions for every patient. I’m incredibly excited about the significant change our two companies can advance for healthcare.”

Acquisition Creates A Gold Standard for Device & Drug Intelligence to Optimize Patient Value

As reimbursement models move from fee-for-service to fee-for-value, GHX believes Lumere’s capabilities will extend its value to more directly improve patient outcomes at the lowest cost by empowering customers to make evidence-based purchasing and utilization decisions. Since its founding, GHX has created healthcare’s largest vendor-neutral modern digital trading network with access to hospitals representing more than 80% of licensed beds and a significant number of major suppliers in the US.

By combining the powerful assets of GHX and Lumere, GHX seeks to create the gold standard in data governance, providing a single source of trusted information for the management of devices and drugs used in the delivery of care. The Lumere acquisition also significantly extends GHX’s footprint in the pharmaceutical market, helping health systems more strategically manage the complex area of pharmacy cost.

“With health systems more accountable than ever for the results they deliver, the strategic imperatives of reducing cost and improving quality of care are more critical than ever,” said Bruce Johnson, CEO and president of GHX. “We’ll continue to support our customers in their evolution from reimbursement based on quantity to reimbursement based on quality. We will do this by combining the strength of the GHX platform and the industry’s most comprehensive repository of item and transaction data, with Lumere’s deep clinical data and machine learning powered analyticsto deliver the critical evidence-based insights healthcare needs. Like GHX, Lumere is a company focused on innovation and customer-centricity, and we couldn’t be more delighted to welcome them into our organization.”

– GHX Survey finds healthcare supply chain data and standardization key to accelerating healthcare’s shift  to value-based care.

– The survey highlights the role of healthcare supply chain data will play during the year(s) ahead in solving the cost-quality-outcomes equation.

Global Healthcare Exchange, LLC (GHX), a healthcare business and data automation company has announced the results of a survey conducted among its Best 50 provider organizations regarding healthcare supply chain priorities for 2020. The survey highlights the role healthcare supply chain data will play during the year(s) ahead in solving the cost-quality-outcomes equation.

Supply Chain Shift to Value-Based Care

Today’s supply chain professionals are tasked with bringing increased levels of automation and standardization to supply chain processes to support the healthcare industry’s shift to a value-based care model. Process and efficiency improvements rely on accurate accessible data. Survey results show respondents are implementing initiatives that will empower them to make data-driven decisions to improve efficiency, reduce costs and gain visibility into the true cost of care.

GHX Best 50 supply chain leaders identified two primary initiatives that will support the move to value-based care in 2020:

1. Better Use of Data and Standards to Support Value-Based Care

The shift to a value-based care model requires that the healthcare industry finally understand the true cost of delivering care, including the costs of products, which products deliver the best outcome at the best price and how to reduce clinical variation around what works best for the patient. Standardized supply chain data allows all stakeholders to understand the relationship between the cost to deliver care and the outcomes achieved.

Standardization enables supplier and provider organizations to take a more strategic and informed approach to a broad range of clinical and financial systems, including EHRs, patient billing, recall tracking, value analysis activities and comparative effectiveness research. For example, GHX Best 50 provider Franciscan Missionaries of Our Lady Health System (FMOLHS) is using standardized and enriched supply chain data to better understand the cost of providing patient care and how variation affects both cost and quality.

2. Supply Chain and Clinical Systems Integration

The integration of supply chain and clinical systems will become increasingly critical to reduce variation in costs and quality and accelerate the necessary adjustments to improve outcomes. To account for the products used during a care episode, prepare for recalls and capture a greater percentage of case charges, healthcare must ensure the systems supporting every aspect of care is connected and able to share timely and accurate data.

For example, Stanford Health Care has created tighter integration between its supply chain and clinical systems, which allows supply chain professionals and physicians to collaborate on standardization and cost reduction initiatives

Pulse Check for Healthcare Leaders

Our annual survey provides a pulse check regarding the direction in which these leaders are headed. In keeping with the theme of this year’s AHRMM Supply Chain Week, ‘Health Care Supply Chain: Advancing Health Care Through Clinical Integration,’ our survey found these Best 50 providers are not only pushing for greater levels of automation and standardization within supply chain processes, but also for ways to drive integration with clinical processes,” said  Bruce Johnson, president and CEO of GHX.

Slowly, but surely, supply chain management is evolving. GHX’s Bruce Johnson explains.

It’s hard to believe that after nearly a decade of embracing HIT, the U.S healthcare industry still has its share of technological growing pains. Perhaps there is no better example than supply chain management (SCM), where manual methods often remain the default despite the enthusiasm to take things virtual.

According to a recent survey conducted by Sage Growth Partners, most executives believe SCM is a priority and that improved solutions can positively impact costs and care quality; more than half of the 100 healthcare and supply chain executives surveyed believe it could increase margins by at least 1 to 3 percent. However, the survey also revealed that most hospital leaders were not investing in SCM and using outdated, manual processes (such as spreadsheets) for supply chain data.

Health executives stated that a lack of the right technology is a crucial barrier in reducing supply chain waste. However, Global Healthcare Exchange’s (GHX’s) Bruce Johnson would argue that the solutions to help healthcare organizations meet the challenges of SCM are out there— but you have to know what to look for and where to find it.

“In the era of value-based healthcare, providers and manufacturers are seeking to understand the true cost to deliver care and the efficacy of products being used to deliver it,” said Johnson, CEO of the cloud-based SCM solutions provider based in Louisville, CO. “To achieve this, the healthcare supply chain needs known and precise data. EHRs and ERPs are the core systems providing this information. GHX ensures that these systems are working from a common data foundation through the integration and enrichment of clinical supply and implant data.”

Since 2000, GHX has taken on the aim of helping both providers and their suppliers create efficiencies and reduce waste in the supply, leveraging the fact that organizations must satisfy the requirements of value-based care to receive reimbursement. Today, the company works to improve upon this goal by ensuring that their solutions are clinically integrated with an organizations’ existing technology (including EHRs and ERPs) to maximize data quality while reducing the headaches and hiccups that often come with the adoption of new solutions.

Johnson believes now is the time to make SCM a priority, as the demands on providers over the next decade will only make SCM more challenging. According to the Association for Healthcare Resource and Materials Management, supply chain costs are predicted to exceed hospitals’ labor costs by 2020. A Navigant report from 2017 also estimates that hospitals are wasting more than $25.4 billion on the supply chain and could individually save as much as 17.7 percent (nearly $11 million) per year, with the right supply chain improvements.

“A clinically integrated supply chain is critical,” said Johnson. “GHX is expanding its offerings to extend the value of our customers’ EHR investments. We are achieving this by leveraging our item data core to ensure that the right clinical supply and implant data is available at the right moment. Customers embarking on a modern-item data strategy will have confidence in their data as they look at product standardization for reducing clinical variation, contract utilization, and metrics that support the cost of care initiatives.”

GHX aims to achieve this by focusing on the capture, enrichment, and integration of data into business processes to deliver value to its customers. “We apply this approach to processes ranging from order-to-cash and pricing alignment to inventory management and clinical documentation. Our unified and curated item data core, coupled with healthcare’s largest digital trading network, allows us to extend the value of our customers’ investments in ERPs, CRMs, and EHRs,” he said.

Naturally, Johnson recognizes that competition is out there, but he does have some core recommendations for providers seeking to employ SCM solutions. “In today’s environment, a clinically-integrated supply chain requires four key pillars: a modern item data core that aligns and powers core enterprise systems; focus on utilization and adoption; a digital trading network to support a just-in-time supply chain process; and analytics that guide employees to areas for continuous improvement,” he said.

How important is an integrated solution? According to Johnson, it’s fundamental, citing that solutions that do not leverage the information from existing technologies don’t work because they often end up underutilized or there is a lack of adoption altogether. The most critical elements for SCM adoption success are to ensure the data powering the SCM is unified, known, precise and current and can effectively encourage trading partners to engage with SCM efficiently and consistently.

 “As SCM evolves, more of the business processes these systems support become deeply entwined with trading partners, “Johnson added. “Thinking through the complete process, understanding the data needs of that process and having a plan to measure and drive utilization, are keys to the successful adoption of SCM solutions.”

The Future is in the Cloud

Although growth has been slow, Johnson is confident that the accessibility of more sophisticated clinically integrated SCM solutions will move to accelerate the pace of the virtual SCM evolution. There is a significant movement to cloud-based ERPs; and with providers demanding precise data (in real time), that trend is expected to accelerate. While the EHR space hasn’t quite risen to the cloud quite yet, the fact that care is moving beyond the walls of traditional hospital systems to clinics, and even patient homes, indicates that inevitable change is in the air.

Johnson expects that the next five years will support a more rapid movement and adoption of cloud-based SCM solutions. Ideally, the industry will move its core SCM solutions to the cloud and begin capturing the value from an industry level for item data core, digital trading network, and compliance network.

As for the long-term impact cloud-based SCM solutions will have on U.S. healthcare:

“Ultimately, healthcare is driving towards the quadruple aim of balancing cost, quality, outcomes, and finances. Achieving this means the business of healthcare needs to become a data-driven environment; only this will truly bend the cost curve. Quantifying this is hard, but we envision an environment where a patient can consult with a provider and know in real time, the best care pathways, including the right clinical supplies and implants to achieve the best outcomes,” Johnson concluded.

Jump Technologies, a hospital supply chain solutions provider, today announced it has raised $2 million in funding led by Black Granite Capital and includes new strategic investor Mount Sinai Ventures and reinvestment by two large investors. The Eagan, MN-based company plans to use the latest round of funding to expand the company’s national sales efforts and support broader product development.

Supply Chain Management Is Often Overlooked in Hospitals

Inventory management in hospitals is often overlooked, resulting in $765B in waste annually in lost, unused, or expired supplies. Jump Technologies delivers a cloud-based hospital supply chain software solution called JumpStock, which integrates with any ERP system to help hospitals save money and improve clinical outcomes by providing actionable analytics that drives a new level of standardization of clinical and operational best practices.

Clinical Workflow Integration with Supply Chain

JumpStock integrates seamlessly into clinical workflows and delivers reports that help clinicians and supply chain professionals make informed decisions about supply utilization throughout their facilities – including high-cost areas like operating and procedure rooms. With JumpStock, hospitals can more easily standardize utilization of supplies, which allows them to save money and reallocate funds to clinical resources and technology that improve patient care and generate new revenue.

JumpStock also ensures that clinicians have the right supplies when and where they are needed so as not to slow down surgeries and other clinical therapies. For example, Jump Technologies’ customers, such as the Mount Sinai Health System, have been able to reduce stock-outs, which helps clinical practice, while increasing inventory turns, which improves the hospital’s bottom line.

“Health Systems need to drive innovation in business practices and technologies, not only in clinical care or practice,” said Les Grant, Corporate Director of Materials Management for Mount Sinai Health System. “Our partnership with Jump Technologies has enabled the development of a best-in-class inventory management solution that reflects the unique needs of our system and brings increased efficiency and support to our world-class clinical teams and the patients we serve.”

How Medical Supply Companies Can Take Charge with Digital 

Many businesses today worry about being “Ubered” or “Amazoned” – that is, seeing their markets invaded by digital native upstarts that overturn traditional business models and value propositions.  The healthcare industry’s complex supply chains and regulatory burdens seem to create a high wall that will discourage such disruption. Yet the reality is artificial intelligence (AI), machine learning, data analytics and intelligent automation, broadly known as digital technologies, are already disrupting healthcare by powering three key developments: consumerism; data management; and analytics.  

Some leading medical supply chain companies already are embracing the demands and opportunities created by these forces to build closer relationships with their customers, to grow and defend market share, and to drive down costs and accelerate their revenue cycles. Here is just a sampling of ways in which medical suppliers can use digitally powered tools and strategies to address market trends to their advantage.

1. Consumerism

Medical supply companies traditionally have focused their efforts on successful order fulfillment. That’s changing. Industry leaders realize their customers now expect a great experience, not just a shipment. Further, these leaders recognize they are competing with companies such as Amazon and Apple that continually raise consumer expectations about what constitutes a great experience. And healthcare consumers matter: they are paying for increasingly larger shares of their healthcare through high deductible plans and/or assuming larger percentages of health premiums. They expect price transparency and real-time, intelligent, personalized service. It’s imperative medical suppliers begin to integrate digital technologies into their processes to deliver experiences that meet those expectations. 

Digital technologies today are mature enough to enable medical supply companies to consider customer-centric tactics and strategies like these:

– Personalized supply catalogs.  It is possible today to dynamically create custom catalogs for patients based on their insurance benefits and help them make more-informed supply choices in line with their coverage, co-pays and deductibles. Ultimately, medical suppliers could help patients monitor their eligibility and benefits in real time, calculating and collecting a patient’s financial responsibility up front to streamline receivables while also providing a higher level of customer service.

– Partner with providers for pricing transparency, accessibility and revenue cycle efficiencies. Exchanging data digitally with providers will help streamline delivery of supplies to consumers and improve revenue cycles. Many payers insist on pre-authorizations and prescriptions being on file before approving shipments.

The too-common phone-call-and-fax routines required to ensure all the right parties have the right paperwork at the right times are frustrating for patients and slow supplier reimbursements. Digital technologies such as application programming interfaces (APIs) and electronic data interchange (EDI) can enable providers and supply companies to share pre-authorization and prescription data and even trigger “next best actions” automatically via robotic process automation. These smart digital data flows eliminate error-prone manual processes, speeding claims submission and ensuring patients have prompt access to the supplies they need.

– Digital customer interactions. Digital options for engaging with customers are exploding. Healthcare consumers expect to have an identical and continuous experience with their service providers across all the devices they use to connect, making omnichannel support a given. Chat windows and augmented reality (AR) features also are rapidly becoming standard. Conversational AI agents can answer questions and help customers place orders; AR instructions can help customers understand which products to select and how to use them. Self-service options can help customers set up and manage payments.

2. Data Management

Successful data management is a critical enabler for responding to the consumer-centric shift that is driving the industry. Data can reveal insights needed to deliver better customer service and spark innovation. Medical suppliers must establish a data management infrastructure that can store vast amounts of medical information in a flexible way.

The necessary data goes beyond basic claims and order information to prescriptions and other medical documentation requests, including to whom supplies and documents were sent, the supply period, document status and more, to enable sophisticated analysis on provider trends. Going further, software bots and sensors make it easy and relatively inexpensive to gather even more data by instrumenting operations and IT processes as well as physical equipment used in warehouses, fulfillment and shipping.

3. Analytics

Analytics can reveal important patterns in and across large data sets such as order data, provider response data, and claims data. Analyzing this data can help reveal trends, such as a steady increase in payer claim rejections not only related to a specific payer or provider, as well as the ability to drill down to specific data elements that are missing or incorrectly documented, resulting in denials. Then suppliers can take the specific corrective steps needed to ensure clean claims submissions and fast first pass reimbursement—wins for the payers, providers, suppliers and consumers.

Analytics coupled with machine learning and AI also can help anticipate patient queries so these can be addressed even before the questions are asked, thus reducing customer service costs. Medical suppliers may also use analytics to determine population health needs as well as predict effective care management strategies for groups of customers.  The tools could even determine the most cost-effective shipping methods and routes, helping ensure supplies arrive when and where needed.

Getting Digital Done

The above are just a few ways in which medical suppliers can deploy digital to become more efficient while also developing better customer experiences.  Whatever tools and tactics medical suppliers choose, modern tools require a modern IT infrastructure. Older systems—whether five or 25 years old—lack the flexibility required to interact with other systems to deliver real-time, intelligent interactions such as dynamically populating a supply catalog tailored to a specific patient’s benefits plan and medical condition.  Cloud-based infrastructure services can enable companies to quickly and affordably simplify and modernize infrastructure so they can take advantage of next generation digital capabilities.

Organizations must also decide to what level of customer experience they aspire.  Some features will be table stakes—merely the prerequisites for competing at all. Some will be competitive differentiators, and others truly market-leading service levels and capabilities. (Refer to chart here if we are allowed to use it.)  Take the example of delivering greater price transparency:

– Table stakes: Executing and monitoring payer contracts; identifying patient-specific coverage and benefits; and maintaining a current fee schedule and visibility into performance.

– Differentiating capabilities: Proactively identifying contracts due for renewal; analyzing fee schedule performance over time; running batch eligibility verifications; coordinating benefits for multiple payers; estimating a patient’s coverage in real time.

– Market leading: Real-time integration with payers to provide patients with more accurate fee schedules.

Developing such capabilities is a process – though digital tools and development methodologies like DevOps and Agile enable fast prototyping and testing of new capabilities. Some of the early lessons emerging from leading companies embarking on this journey include:

– Thoroughly understand current and future state requirements. These must be specific and complete for each function affected by change. “Ability to send order information to the clearinghouse to generate a claim” is a high-level requirement. The necessary details to gather are the frequency at which the data should be sent (batch vs. real time); the specific data required; security requirements for data transition; the clearinghouse requirements for data receipt or transition (flat file vs. API); and data format. These specific requirements can have a significant impact on the solution architecture, development effort and ultimately the overall program cost.

– Evaluate current products on the market for how well they meet specific needs and how they will work with existing infrastructure. Sales pitches are persuasive so it is critical to ask key questions to understand how much implementation effort will be spent on configuration vs. customization of tools.

– Continuously work toward adoption of new processes and technology. Agile development, done well, is one critical success factor. It’s also important to incorporate a strong change management program. For many suppliers, customer-centricity will be a major transition and old processes will be redesigned. Ensuring success is more than a matter of training: agents must understand why processes and screens are changing and how the changes benefit them and patients, such as by eliminating frustrating telephone tag and billing follow up calls

By taking charge of digital, medical suppliers can create better, simpler experiences for patients and build stronger relationships with them while also improving internal processes and results, from greater employee satisfaction to faster revenue recognition. Those should provide the strength necessary to compete successfully as healthcare becomes more digitized and consumer-focused.

Vanessa Pawlak is the Global Health Compliance Services Leader for Cognizant Consulting. As an Associate Vice President at Cognizant, Pawlak has over 14 years of consulting experience with highly regulated government programs and has previously held the industry title of SVP, Chief Compliance & Privacy Officer.