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Measuring meaningful use of supply data standards [Healthcare Purchasing News]
[March 31, 2014]

Measuring meaningful use of supply data standards [Healthcare Purchasing News]

(Healthcare Purchasing News Via Acquire Media NewsEdge) Who should be held accountable for adoption, implementation? Charles Dickens could apply the opening sentence of his classic novel "A Tale of Two Cities" to the supply data standards movement in healthcare: "It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity..." Clearly, supply data standards momentum in healthcare has weathered its share of fits and spurts, ups and downs along the rollercoaster of progress.

Supply data standards represents one of those issues where, post-universal adoption and implementation, healthcare professionals will step back, scratch their chins and ask with mock disbelief why it took so long to carry out.

Pharmaceutical manufacturers and distributors used the "patchwork quilt" of state regulations for pedigree in the early 1970s to motivate the federal creation, adoption and implementation of a single standard, known as the National Drug Code (NDC) for product identification and the DEA Registration Number (Drug Enforcement Agency) to identify locations for controlled substances. Meanwhile, the grocery, manufacturing and retail industries already were using the Universal Product Code (UPC) for product identification and tracking purposes.


Medical device/product manufacturers and distributors, however, skated around supply data standards until the late 1980s with the formalized Common Category Database (CCD). But the CCD faded by the mid 1990s when critical mass wasn't achieved and key companies withdrew their support of the project.

As healthcare organizations relegated the CCD to industry lore they shifted their interests and allegiance next to a new initiative spearheaded by the Department of Defense and being promoted by the then-named Health Industry Bar Coding Council (HIBCC), along with the Healthcare EDI Coalition (HEDIC). Both HIBCC and HEDIC picked up the supply data standards baton to rally healthcare suppliers and providers around the Universal Product Number (UPN).

With healthcare organizations grappling with President Clinton's healthcare reform efforts the timing seemed right for a renewed push for supply data standards that could be reinforced by the clinical, financial and operational benefits gleaned from adoption and implementation. The migration to open electronic data interchange formats from proprietary systems only fueled the interest as proponents argued for more accurate data flowing through the pipes and not just more data.

By the end of the decade, however, the alluring emergence of online electronic commerce through Internet and Web-based exchanges turned heads. And just like that, HTML and XML entered the lexicon of noteworthy acronyms striving to increase efficiencies, decrease costs and boost revenues along the way.

Unfortunately, the Internet bubble burst within several years. Yet as the smoke cleared by mid-decade healthcare organizations acknowledged the ongoing need for supply data standards particularly because the Internet provided a faster way to transmit information and transact business.

Enter GS1, a global product standardsoriented organization with deep roots in the manufacturing and retail industries. Representatives from several healthcare companies approached GSl's U.S. division to promote healthcare as a viable industry segment for their standards system. Recognizing opportunity, GS1 U.S. launched its healthcare group more than five years ago with aims to accelerate the momentum toward standards adoption and implementation that has been mired in debate and discussion for more than three decades.

Since then, GS1 Healthcare US has signed on scores of healthcare product suppliers and providers to adopt its Global Location Number (GLN) and Global Trade Item Number (GTIN) standards. In fact, GS1 Healthcare US reported solid growth in the number of GLNs and GTINs in use and members added, among other data from 2013, the fifth year of its initiative. (See chart online.) While some will argue that GS1 Healthcare US has recruited more organizations to its standard identifiers than earlier efforts, others will contend that it may have persevered the longest but still has yet to reach critical mass in that the majority of hospitals and other healthcare facilities and suppliers are using GLNs and GTINs on the majority of the products they buy and sell.

In fact, Healthcare Purchasing Neivs annual reader surveys since 2010 have showed that less than half of U.S. hospitals have implemented GLNs and GTINs fully across a majority of product categories. Yet implementation intentions spike around GS1 Healthcare US' Sunrise dates. (See graphic here or online).

"The healthcare industry has moved further and faster than previous initiatives to adopt common data standards in other industries, once the common standard was selected," said Michael Pheney, Vice President, Healthcare, GS1 US. "What took 10 years in the retail industry to achieve with standards adoption is taking only a few years in healthcare. The healthcare industry set clear goals and Michael Pheney utilized lessons learned from other industries, which helped healthcare to accomplish the results to date." When the pharmaceutical industry struggled with the myriad state regulations drug companies took an aggressive approach by seeking a federal guideline to simplify the process with a unique product identifier. The Drug Listing Act of 1972, which established the NDC, fit the bill. Until last year, the medical device/ product industry took more of a passive aggressive approach. Suppliers and providers understood the need for product data standards, but neither would act before the other and certainly not before the FDA provided a "fair regulation that applied evenly throughout the supply chain," according to Pheney.

Last fall the FDA issued its long-awaited guidelines for Unique Device Identification (UDI), which stopped short of recommending or specifying a particular standard system, leaving that up to the suppliers and providers to choose.

So amidst this storied history of dancing around supply data standards, how far has the healthcare industry progressed in the area of medical devices and products within the last five years? Healthcare Purchasing Netvs reached out to a variety of prominent supply data standards experts for them to gauge where providers and suppliers are at this point in terms of adoption and implementation, particularly now with the FDA's UDI actions. HPN listed four key groups within the supplier category: Manufacturers, distributors, software companies and group purchasing organizations (GPOs).

Suppliers: Average to above average Depending on your point of view, suppliers, by and large, are barely outpacing their customers - the providers - in adoption and implementation performance. While some may be farther ahead of the curve than others, some observers noted that the curve itself may be farther behind where it should be.

Mayo Clinic contracts with about 2,000 medical/surgical suppliers with the majority of its purchasing volume concentrated with our largest suppliers, so its strategy has been to address GS1 conversions with the largest suppliers first, according to Joseph Dudas, Vice Chair, Supply Chain Management. Mayo currently uses GLNs with 75 suppliers, which make up 75 percent of its annual med/surg supply expense and GTINs with four suppliers (amounting to 6,000 GTINs), which make up six percent of its med/surg supply expense.

Dudas bluntly evaluated the five-year track record of suppliers, emphasizing that much more work is needed.

Manufacturers earned a "C," for example. "They are doing what is asked of them," Dudas said. "Unfortunately participation is not enthusiastic and for the most part it is a minimalist approach to adoption." He was more generous with distributors, awarding them a "B" overall. "If asked specifically to participate, they have and done so enthusiastically," he said. "Unfortunately, not many of their customers are asking them to participate nor are the distributors asking their customers to convert." Software companies fared no better than manufacturers with a "C" grade. "The software companies, for the most part, have made their systems work but have done very little to make implementation easy." GPOs gained some grace with a "B" grade. "Similar to the distributors, when asked, they have participated enthusiastically," he said. "However, they have failed to truly embrace standards in their own operations and have missed opportunities to gain efficiency as well as leverage their scale. They have done little if anything to make use of standards a customer requirement." Jean Sargent, CMRP, FAHRMM, CRCST, has served as a standards evangelist behind the lectern, on the dais and in the news, a recognized veteran in the campaign.

As Director, Consultants, Med Assets Advisory Solutions, and a former hospital supply chain leader, she recognizes the challenges all around.

Sargent gave manufacturers a "B+" due in part to pending UDI compliance. "There are many manufacturers that have been using the standards for over 10 years," she acknowledged. "There are many others well on their way to implementation, and many more working to determine the steps necessary for compliance." Distributors, however, didn't fare as well under Sargent's estimation as they netted a "B" for their efforts. "I believe being a middle man [means] this implementation is very complex as data must flow in multiple directions," she indicated. "The major distributors are all working diligently to move forward with the adoption of standards." With a "C+" software companies took the biggest hit on the supplier side by Sargent. "The major healthcare software companies have been working toward enabling their software to work with the standards," she said. "Without the capabilities built in to the software, the standards adoption movement cannot move forward. There are many software systems that are far behind in creating the capabilities to enable use of data standards. The challenges are to get the capabilities put into place [and] then get the healthcare providers to update their systems.

Sargent granted the highest mark at " A-" to the GPOs. "I believe the GPOs are all very interested in supporting the standards," she noted. "They have been working diligently for 10 years to garner adoption amongst their member manufacturers and providers. Due to their efforts, understanding the value and adoption, specifically over the past three years, has moved forward considerably." Keith Lohkamp, Product Director, Infor, haled distributor efforts but stopped short of assigning them a letter grade. "The primary distributors have done a good job of encouraging use of the standards," he said. "However, implementation, particularly of the GLN, has often been complicated and extended by unique business processes that have to be reworked or creative system configurations that have to be reviewed." Lohkamp also defended software company efforts and accomplishments with some context but no letter grade. "The major software vendors have all recognized the need to support standards and have taken steps towards or have delivered enhancements," he noted. "For example, Infor delivered enhancements to Lawson Supply Chain Management in October 2009 to support GS1 standards, and most of our customers have moved to this version and would be ready to implement. However, for many other systems, these features have been delivered more recently and it takes time and money for hospitals or suppliers to upgrade, creating an impediment to adoption." He did not evaluate manufacturers, GPOs or even providers.

As one of the earliest adopters of supply data standards in the manufacturing category, BD arguably represents the manufacturer torch-bearer for compliance with Dennis Black, BD's Director, E-Business, as the herald. Black expressed discomfort in evaluating entire industry segments with broad brushstrokes.

"It isn't fair to assign a single letter grade for data standards adoption for the performance of 8,000 dissimilar medical device manufacturers," Black asserted. " When you walk through a distribution center or stockroom, you will notice that most medical devices now have either a GSI or HIBCC bar code on them and the investments made by device manufacturers is evident. In response to the FDA UDI rule, we will certainly see continued investments until all products meet the requirements." Instead, Black offered his own grading system that can be used for individual manufacturers.

* "Award an 'F' for those manufacturers who haven't started the journey towards adopting data standards. This group does not have a labeler code, they don't have any bar codes on their products, or they utilize a proprietary bar code that is impossible for healthcare providers to decode. Healthcare providers have been asking manufacturers to implement data standards for almost three decades. We need to serve our customers and use data standards to help them improve patient care and improve our supply chain.

* "Award a letter grade of a 'B,' 'C or 'D' for those manufacturers who have started the data standards process and are now heavily investing in UDI. Some will 'check the box' and do the minimum necessary, while others will emerge to help add value for their customers and the overall healthcare supply chain.

* "I would reserve an 'A' grade for those manufacturers that didn't wait for a regulation to begin serving their customers. They implemented standards on a voluntary basis and are now refining labels and processes to become UDI compliant. These manufacturers are implementing UDI, and data standards in general, using a customer-centric approach that improves the entire supply chain (EDI, business transactions, easy-to-scan bar codes, clean master data, SSCC, GLNs, etc.).

Black gave "the small minority of software companies that have already enabled use of data standards" an "A" grade. "These leading software companies have been customer centric from the start," he said. "They have invested their time helping interpret the requirements and their resources by modifying their software. Since software is a key enabler to using data standards, the software companies that aren't modifying their products for data standards should get failing grades for ignoring their customers' requests. Healthcare providers, suppliers and GPOs can readily name which software companies are supporting them." GPOs gained a complimentary and contextual deferment from Black as they occupy a different role. "Many GPOs have created data standards requirement for their suppliers in their contracts and are taking steps to support their members to adopt standards," he said. "While the GPOs are certainly part of the process, since they don't take possession of the product or transact, I wouldn't expect that they could truly drive the process." He applied similar justification to distributor deferment and added that providers should be the ones who evaluate both.

Deborah Templeton, R.Ph., MHA, Chief, Care Support Services, Geisinger Health System, described a grading system but offered a frank and thinly veiled assessment of market progress to date.

Templeton said "A" grades should apply to those who have fully implemented standards with "no breach in physical or data flows from manufacturer to patient or documented disposal." Those who deserved "B" grades may be working with GDSN on the front end, have their own GLNs with a secure physical chain and are working on integrating billing, EHR and recall processes. "C" grades can be applied to those organizations transmitting GLNs and GTINs electronically, and "D" grades to those working with GLNs only. Those who say, "GS-what?" get an "F," she retorted.

Scale of implementation and percentage of participation also are key factors, according to Templeton. She minces no words and offers little wiggle room in terms of numbers. Naturally, 100 percent participation earns an "A," greater than 80 percent a "B," greater than 70 percent a "C," and greater than 60 percent a "D." Less than 60 percent should merit an "F" at this point.

As a result, Templeton gives manufacturers overall grades that vary from "B" through "D," major distributors "C" to "D," software companies "B" based on the assumption that they've built capabilities for providers and suppliers to achieve their own "B" grades, GPOs similar to distributors and finally providers the widest-ranging "B" through "F." Templeton is a founding member of the Healthcare Transformation Group, which was formed in 2010 to by five healthcare systems to share best practices and drive supply chain process improvement changes.

Dennis Byer, principal, DSB Consulting, which specializes in UDI education, implementation and project management services, and former Global Healthcare Standards Lead, Novation LLC, offered his own direct assessment.

"With the publication of the FDA's final UDI rule, manufacturers are now required to meet the mandated implementation timeline, and there will not be any manufacturers who ignore the regulation," Byer said. "If a manufacturer has FDA Class 3 products with a deadline of September 2014 and hasn't started, they are going to be late. Many manufacturers say that to get product and labeling changes into the pipeline it takes a couple of years. In the industry groups there were arguments about this first implementation date for Class 3 products, and most manufacturers wanted two years and not the one-year deadline that is in the final rule.

"From both a historical perspective and a current perspective many manufactures are committed and moving forward with or without a regulation," Byer continued. "However, some manufacturers will continue to use any means available to potentially delay or postpone their implementation. The final UDI rule basically says to the manufacturers, 'if you believe that your product should have an exception, talk to the FDA. If you have some circumstance that will interfere with your ability to implement, talk to the FDA. If you have existing inventory that is labeled but does not meet the requirements of the UDI, there is a three-year grace period to use up that inventory.' Some of the manufacturers will use of all of these options if they are not ready to meet the UDI requirements by the mandated timelines." Distributors face similar challenges even if they work with private-label products or have to repackage items, according to Byer. They still must affix a UDI to the label by the required deadline.

"Most of the distributors are focused on implementing GS1 standards and the UDI," he said. "However, there are concerns about the level of commitment, and most of the regional distributors aren't even 'in the game.' At this point in the initiative, any organization that feels that the industry has not embraced GS1 and the UDI is not really committed to improving patient safety and lowering costs." Byer expressed "great concern" about the software companies. "There are a handful of software providers who are totally ready to support GS1 and the UDI, but there many others who aren't even 'aware,'" he noted. "GS1 should take on the challenge to reach out to the software providers, to educate and help them move forward, but so far that has not happened. Even with the software providers who are ready, a hospital must upgrade to the correct version and perhaps spend millions to support the upgrade process. With all of the pressure hospitals face today regarding meaningful use and the implementation of the electronic health record many hospitals cannot afford to do both. The UDI regulation from the manufacturer and distributor perspective will happen. Unfortunately, it won't really mean much if the hospitals' systems are unable to support it." GPOs, on the other hand, may be too distracted by other business-related issues to give supply data standards adoption and implementation the weight it deserves, according to Byer.

"The GPOs have a great opportunity to play a key role in all of the work that will be required to fully implement the UDI," he said. "However, the GPOs seem to be more concerned with IPOs, 'alluring' member hospitals from one another and are focused on bottom-line revenue. Playing a role on behalf of their member hospitals in the implementation of standards and the UDI initiative does not appear to be a very high priority.

"Going back 13 years ago the GPOs created the first version of the Coalition for Healthcare eStandards (CHeS)," Byer recalled. "This was an independent association that was founded for the purpose of GPO collaboration and the implementation of global data standards in healthcare. To this day, implementing standards is the right thing to do for the right reason and continues to be a 'white hat cause,' something that could change the negative perception of the GPOs." CHeS now stands for the Committee for Healthcare eStandards, operating under the banner of the Healthcare Supply Chain Association (HSCA).

"Through CHeS, the GPOs still have a great opportunity to impact the implementation of GS1 standards and the UDI," Byer insisted. "This year they are focused on initiatives to push the supplier community to publish their product data to the GDSN and to have common data requirements so that if a supplier meets the requirements of one GPO then they will meet the requirements for all GPOs. Maybe CHeS can reach out to the software providers and partner with GS1 on this critical piece of the puzzle. The current co-chairs and other GPO participants of CHeS have some great ideas on how to help the industry move forward. The biggest challenge for CHeS is to avoid the competition that we see today." Byer added that while FDA mandates UDI implementation the biggest variable is how long it will take for the industry to fully realize all of the benefits it provides.

Providers: Average Despite the breadth and depth of educational seminars, Webinars, and plethora of trade publication stories and marketing materials in circulation, hospitals have miles to go to break out of mediocrity.

Dudas gave a sobering assessment of provider performance.

Hospitals and other healthcare facilities earned a "C" at best. "Only a few are adopting standards throughout their supply chain, and I doubt there are more than a handful that are truly Sunrise 2010 and Sunrise 2012 compliant," he noted.

Sargent concurred with a "C" for hospitals. "Many of the major providers understand the benefits to adoption of the standards and are well on their way to enable the use of the standards within their organizations," she said. "The adoption within those large organizations will span large to mid-size to small and possibly rural hospitals. There is a lot of opportunity for education to help providers understand the benefits of adoption and implementation. However, just as any transition, there are hurdles to overcome, such as the belief that this is just another fad or time constraints that do not allow for innovations.

"In my opinion, it is up to the early adopters to pave the way, creating guidance documents for others to refer to, creating a path of least obstacles to adoption and implementation," Sargent continued. She added that non-acute care facilities af- filiated with larger organizations have just begun their journey with standards and that there is opportunity for more education on patient safety and efficiency on this issue, which can be more complex for this space.

"Like manufacturers, healthcare provider use of data standards runs the gamut from 'A' to 'Incomplete,'" Black indicated. "The 'A' grades go to [those organizations] that are either in the process of implementing now or are investing in system changes at this time. There are a number of IDNs that are actively modifying their enterprise resource planning (ERP), materials management information systems (MMIS), warehouse management systems (WMS), electronic health record (EHR) or other systems to leverage the wealth of data available through data standards. I expect that compliant software will help them to turn the 'Incomplètes' into value-added processes." Joe Pleasant, former Vice President and CIO, Premier Inc., who recently retired after 41 years with the organization but continues to serve in a consulting role, reflected somewhat favorably and fondly on industry progresss.

" [I'm] not sure providing a grade at this point is useful since most all supply chain participants have been waiting for the final FDA ruling before starting their adoption and implementation," Pleasant said. "Thus, given that most participants have taken a wait-to-see-the-FDA-rule position I would provide a grade of 'C in actual adoption and implementation.

"There are several large manufacturers that made a decision to move forward with adoption and implementation prior to the final ruling, and these front runners are establishing the path for others and will be ahead of the field," he continued. "I also believe they will achieve the benefits before others. If we look at involvement by the participants in assisting and pushing FDA toward the rule and the specifics associated with the [Global Unique Device Identification Database] (GUDID) system I would give provider and supplier participants an 'A.' There are many industry groups that have provided FDA excellent input and served as pilots to test the specifics of the FDA requirements in the final ruling." Every hospital in America will implement the UDI, Byer noted, but they struggle with competing priorities. "The hospitals face an enormous amount of obstacles, including funding, availability of resources and the absence of software that supports the UDI," he said. "Many hospitals are so overloaded with information and new requirements that they don't know where to start. There are only a small percentage of hospitals who can afford to implement both the electronic health record and the UDI at the same time. Unless a hospital has the resources and the funding, full implementation of the UDI and realizing the benefits of the rule could take a decade or more.

"The discussions in the press and in industry group meetings typically focus on the cost of the UDI and the impact to medical device manufacturers, the stifling of innovation and the loss of jobs. There has to be more focus on the patients, the group that is ultimately going to pay for all of this and who will be most impacted," he insisted. HPN For the sidebars, "2013 GS1 Healthcare US highlights" and "What does GS1 Healthcare US say?" visit www.hpnonline.com/ inside/2014-03/1403-SF-DataStandards.html.

(c) 2014 KSR Publishing

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