With healthcare reform, healthcare delivery organizations are living in two worlds: the past, where they have been paid/reimbursed for the services they perform, and the future, in which those payments will be based on their ability to report on and deliver quality care in an efficient manner. No one is sure exactly how this will be accomplished, but one thing is certain: government reimbursements are going down—down from a level that today only covers about 80 percent of the cost of delivering care. At the same time, healthcare providers are being required to invest in and ensure "meaningful use" of electronic health record (EHR) technology.

Against this backdrop, supply chain leaders are in the difficult position of trying to demonstrate the importance of investing in the supply chain. The key is demonstrating how the supply chain can ease the financial strains of healthcare reform. Here are some examples:

UDI in EHRs
Meaningful use of EHRs will likely require inclusion of unique device identifiers (UDIs) for products used in patient care. Manufacturers are preparing for the U.S. Food and Drug Administration mandate requiring them to assign and label their products with a unique standard code, such as GS1’s Global Trade Item Number (GTIN) or Health Industry Business Communications Council’s Labeler Identification Code. Healthcare providers need to consider how they will include the UDI in EHRs, including capturing data at the point of use and ensuring their supply chain systems integrate with their EHR systems.

Value-based purchasing
With the move to value-based care, hospitals will need to pay more attention to the cost of the supply chain, which can account for up to 45 percent of total operating expenses. This is especially important for hospitals that perform a high number of orthopedic and / or cardiac procedures, in which the price of the product can account for as much as 50 to 80 percent of the cost of the procedure. Capturing data about use of these products is currently a manual process, often performed by both clinicians and supplier representatives. Information technology and process improvements can improve accuracy and productivity across the supply chain.

Moving care (and supplies) outside the acute care setting
To lower healthcare costs, more care will be delivered outside the acute care setting, which is the most expensive real estate in healthcare. More patients will be treated by community health organizations, surgi-centers, retail clinics and at home. Supply chain staff will need to have greater visibility into product purchasing, delivery and utilization beyond the hospital walls. Data must be shared in a standardized manner across systems and facilities.

GHX understands the challenges faced by both healthcare providers and suppliers in meeting the challenges of healthcare reform and how adoption of standards, process automation and use of cloud-based technologies can help lessen the financial burden, while helping to improve clinical performance.