McKesson VP Gives How-To Tips for Effective Supply Chain Management
Arguably the world’s best healthcare IT supplier, McKesson stands as a successful Fortune 500 company leading the way in providing customized healthcare solutions to its international, health-focused clientele for over 20 years. McKesson Technology Solutions partners with its clients by focusing on their respective needs, delivering unique health solutions for integrated care management that enables payors, providers and patients to transform the business and process of care. Focusing primarily on its acute care in hospitals and warehouse management solutions, McKesson has become the one to watch throughout healthcare, as competitors, providers and startups alike look to this industry leader to model their own up-and-coming supply chain solutions.
In terms of how McKesson is able to diagnose and analyze company data to generate solutions, vice president Tabel points to user experience as a point of concentration: “The world has changed a lot in the last decade or so,” says vice president Todd Tabel, Supply Chain Solutions, “If you think about it that way, you realize that even payment methods have changed significantly (what will and won’t be reimbursed), making the right decision upfront even more critical than ever before. We’ve got a solution in that area that is very similar to a Google-like search engine. It allows you to use an artificial intelligence engine to help you find the searches of the right supplies in your organization. We embrace a lot of consumer-driven inspiration, like Amazon, in order to provide for a richer consumer-like environment.”
The difference lies in the approach
With more than 250 managed care clients and 92 percent of the nation’s top 25 health plans using various McKesson’s solutions today, this organization’s supply chain model is being emulated throughout the industry. Targeting acute care hospitals specifically, the McKesson Artificial Intelligence (AI) platform and consumer-driven IT solutions focus on efficiency, customer need and cost-effectiveness in order to improve revenue for clients and reduce overall expenses.
The vice president of McKesson Tabel went on to comment on the evolution of healthcare IT solutions and the current state of today’s market, saying, “Given health care reform today every healthcare executive is looking at operating margins for some way to either improve revenue or reduce expenses. For the most part, hospitals are looking to reduce expenses in non-labor areas, with medical supplies becoming the second-greatest lever afterwards. Research also suggests that supplies are overtaking labor as the top area for new savings. Everybody is looking for an opportunity to reduce non-labor expenses and the McKesson Strategic Supply Sourcing TM solution is able to identify opportunities for those organizations.”
Fusing of innovation and interoperability
Healthcare executives are honing in now, more than ever before, on how to invest short-term in the best healthcare IT solutions in order to cut costs in the long-run. McKesson holds true to its beliefs in not only putting the consumer or client first, but doing so with a company-wide sense of integrity to move these businesses forward with the best possible IT services.
Management executives at McKesson exude this internalized commitment to healthcare excellence, reminding fellow industry members and customers that healthcare IT solutions are not a one-time service; this relationship is a constant work-in-progress to ensure the customer’s success rises in line with the ever-increasing changes of the healthcare marketplace. This proves to be the inherent difference between McKesson and others in its field — an innate commitment to true, quality, customer-centered service.
“There lies the difference of the solution: the customization in the consumer-driven AI platform,” says Tabel. “There really are three unique things that we provide in this part of our supply chain. We have business advisors that are constantly monitoring the performance of the organization, pulling out what opportunities are represented in their eyes bringing those forward, and it’s all a part of the cost of the solution. It's not some special highest-end consulting project. In a world of cloud computing, we believe that you have to operate a little differently and we do with this solution, because we do have some traditional software solution.”
Tabel suggests that part of managing and innovating a supply chain requires not only being ahead of the curve, but anticipating and reacting to market changes before they happen. Customer service is emulated throughout the McKesson team, turning this company pillar from a mission into the standard business approach:
Vice president Tabel continues, “A typical IT provider can sometimes be accused of developing, selling and installing a solution while only leaving the installer support number for customer reference. This is just a standard part of doing business to most providers, so on an ongoing basis, we understand that we're representing the opportunity center there. We're monitoring the system performance, so we can understand things like: why Nurse-X tending to buy off contract a little bit more? How is she making those non-formulary decisions? We can determine things like why Physician-X drives a majority of the business and what his specific preferences are. It’s these types of realities that present a great opportunity for us to go in and analyze. So, to do this, we put our feet on the street in order to assist customers with the success and deployment of this developed solution.”
Ask the expert
Finally, HCG sat down with the industry leader and asked McKesson how to encourage up-and-coming health solutions companies to embrace innovation and interoperability.
HCG: If you were to coach a healthcare start-up, who looked to McKesson for ways to improve its own IT solution, what would you say to those start-ups? How would you coach them in building their own business?
McKesson: I would say one of the tenants that we're constantly following up with is the development of our cloud-based solution and drive to put the customer first. We believe the way to achieve success is to think and act on behalf of the customer, to remove the burden of the customer in an implementation, and to automate those practices. As a company, you’ll see greater return, and you’ll be much closer to the customer, because you will get to know them personally and understand how their system operated. It’s no longer an unsupported process; it’s not just a 1-800 number anymore. It’s real commitment to a real subject matter expertise that customers can then have access to, and have a frank dialogue with in order to help them navigate a healthcare crisis. It’s about becoming a business partner with the customer; be a good, active business partner and take the opportunities that are presented to you.
To stay updated on Tabel’s view of the healthcare supply chain, subscribe to his blog.
This feature was printed in the July edition of Healthcare Global magazine.
Medical device companies: how to prepare for Brexit
Over the last decade, medical device businesses have been no strangers to regulatory changes and new compliance requirements. Companies with devices in the EU market have been working hard to achieve conformity with the requirements of the EU Medical Device Regulation 2017/745 (MDR) and In Vitro Diagnostic Regulation 2017/746 (IVDR), but the UK’s exit from the EU, effective as of 1st January 2021, demands yet another change: to comply with the new UK regulatory regime.
The Medicines and Medical Devices Act passed into law on 11 February 2021 does just that; it enables the UK to build its own regulatory system, although when this new framework will be fully in place is not yet known.
The transition to the UK’s new regulatory regime officially began on the 1st of January 2021, and with it a series of deadlines and phases that medical device manufacturers exporting to GB and Northern Ireland would do well to take close notice of. During the transition period, the UK Medical Devices Regulations (UK MDR) 2002, not to be confused with the EU MDR, will continue to apply in England, Scotland and Wales, whilst CE marked medical devices will still be accepted up to 30th June 2023.
The conformity assessment processes defined in the UK MDR 2002 (as amended) will require that medical devices carry the UKCA mark for entry in the GB market or the UKNI mark for entry in Northern Ireland (where the devices are not CE marked for the EU). In Northern Ireland, where the rules for placing a device on the market differ, the EU MDR and IVDR will apply in 2021 and 2022 respectively, in line with the EU’s implementation timeline.
This easing-in period of transition is valuable time that should be used productively by manufacturers to ensure that they get up to speed, keep up with relevant updates and prepare strategies and product portfolio for the next phase. To do this, businesses should make sure they consider the following areas as they assess their strategy for UK market access:
Potential Overlap with EU MDR and IVDR
Medical device manufacturers have been working to implement measures to ensure they comply with EU MDR and IVDR for quite some time. The experience, processes and objective evidence that they have gathered in these efforts are certain to be of use when applying for UKCA marking.
Product portfolios and new product pipelines should be evaluated against both overall compliance risk and commercial and strategic value. By identifying the regulatory compliance status for each product for the UK market and the efforts required to maintain that compliance, manufacturers can plan to use the grace period up to June 2023 to complete their activities. These plans should also be evaluated in consideration of the commercial importance of the individual products to help prioritise the workload. This may well result in the decision to discontinue certain products in the UK or to introduce new products on the UK market ahead of other markets.
Engage with Approved Bodies
This activity cannot take place too soon; as of the 1st of January 2021, UK organisations that were acting as EU Notified Bodies have become Approved Bodies in the UK, while EU Notified Bodies are no longer able to provide conformity assessments under the UK regulations. As there are currently only three UK Approved Bodies offering this service, there is a very real risk that latecomers will struggle to find a UK Approved Body to carry out the conformity assessment required to attain their UKCA mark in time.
Just as EU Notified Bodies are no longer relevant to pursuing UK certifications, UK-based Authorised Representatives are no longer valid when CE marking against the MDR or IVDR. Manufacturers using UK-based EU Authorised Representatives must switch to an EU-based Authorised Representative.
For the UK market, the role of the EU Authorised Representative is also no longer applicable. Non-UK manufacturers must have a UK-based Responsible Person (UKRP), which is equivalent to the EU Authorised Representative in terms of roles and responsibilities. Only one UKRP may be appointed, unlike EU Authorised Representatives, and they must have a registered place of business in the UK in order to register with the MHRA. Approved Bodies may be able to provide details of organisations acting as UKRPs and once this role has been assigned it will be critical for manufacturers to determine exact procedures for managing documentation and that clear communication channels are established.
Labelling and Import/Export
New UK regulations require that medical devices bear a UKCA mark in addition to the name and address of the UKRP for non-UK based manufacturers. Manufacturers who use the same products/packs for the EU and UK markets will need to consider the impact of adding more content to their labels in terms of usability for the supply chain and end-users.
While CE marking and certificates will continue to be recognised by the UK until June 2023, import/export administration is likely to change and become more burdensome. Manufacturers using separate products for GB (UKCA) and the EU and Northern Ireland (CE marked) will need to plan for how to ensure that the CE marked product is not shipped to GB post June 2023. Ensuring that processes and resources are in place to deal with developing situations will help manufacturers hit the ground running.
Many businesses will find that clinical investigations are carried out across multiple sites, some of which are outside the UK. In these instances, manufacturers will do well to have a plan for implementation and management of investigations, in compliance with local requirements. It is likely that the MHRA will also continue to update their requirements for clinical trials in the UK.
Data Protection and Standards
New tensions are emerging between the EU and the UK concerning UK data protection rules and the EU’s General Data Protection Regulation (GDPR), suggesting that maintaining ‘equivalency’ may involve a number of different phases.
Compliance with applicable standards also requires close attention; the list of designated standards for medical devices issued by the UK’s Department for Health and Social Care is based on the list of harmonised standards published in the Official Journal of the EU, which in turn are harmonised to the MDD, AIMDD and IVDD. More recently published standards, however, have not been harmonised to the latter European directives and are thus not in the UK’s designated list, despite being considered state of the art. It would be prudent for manufacturers to monitor the state-of-the-art standards and apply where applicable, rather than rely on superseded and outdated standards.
As the UK moves into a new regulatory regime, medical device manufacturers who have already invested time and resources to comply with EU MDR and IVDR can use this to attain their UKCA mark. However, a dynamic compliance environment combined with the new onus relating to export policies means that close attention needs to be paid on numerous fronts. Keeping pace with this changing environment will ensure that manufacturers face the future with confidence and do not lose important space on their markets.