Supply chain deficincies in hospital operating rooms
Despite the fact the healthcare industry is fueled by scientific advancement, too many hospitals find themselves stalled at a crossroads, struggling to embrace business-focused technologies and best practices that will allow them to flourish in the decades to come. This is the troubling picture painted by results of a new independent survey released today by GHX.
The GHX survey of hospital senior executives indicates that operating room (OR) supply chain deficiencies have slowed organizational decision-making, increased costs and inefficiency -- and ultimately impact the delivery of patient care. (Click here to view survey infographic).
“Today there aren’t widely-adopted, end-to-end supply chain management processes for implantable devices as there are for medical-surgical supplies. As a result, the operating room has become one of the most siloed areas in a hospital,” said Bruce Johnson, president and CEO, GHX. “Implantable devices are estimated to account for approximately $50 billion as a market segment. Lack of visibility and control over these devices cost the healthcare industry an estimated $5 billion per year from inefficient manual processes, and lost, expired and wasted product. Until suppliers and providers fully embrace technology to streamline processes and reduce waste, our nation’s healthcare system will never be able to lower costs for consumers in any meaningful way.”
Key Research Findings:
Too Many Hospitals Stuck in the Supply Chain “Stone Age”
· Survey results showed that 79 percent of senior hospital executives say keeping supply chain costs down is important to addressing key financial challenges, such as a decline in profit margins and shrinking reimbursements from government and private payers. Yet, 78 percent of respondents report hospitals are playing catch-up in terms of implementing effective supply chain technology solutions. And one-in-five (18 percent) say they’re still stuck in the “Stone Age” – dramatically lagging behind where they could and should be.
The Lack of Supply-Chain Visibility in the OR Comes at a High Cost
· Nearly two in three executives “strongly agree/agree” that their hospital lacks real-time reports (62 percent) and advanced modeling techniques to inform decision-making (65 percent) when it comes to their hospital’s implantable medical device supply chain, making the streamlining of delivery of care in their hospital an even more significant hurdle.
· Seventy percent of respondents say excess clinical time spent on inventory replenishment is a “very” or “somewhat significant” challenge to their hospital’s operating room. Almost half of respondents (45 percent) “strongly agree/agree” there is a lack of accurate implantable medical device supply chain reports.
“Where’s that Hip When I Need It?” – Supply Chain Failings Trigger Procedure Delays, Recall Challenges for Hospital ORs
· Especially alarming is the role the supply chain plays in potentially having an adverse impact on efficiency and cost savings in the operating room:
- 55 percent of respondents say that surgical procedure delays due to sales reps ordering medical-surgical devices are a “very” or “somewhat significant” challenge.
- 53 percent of respondents say staff ability to locate medical-surgical supplies when needed is a “very” or “somewhat significant” challenge.
- And perhaps most concerning of all: despite the fact that 74 percent of respondents report their hospital has a system that allows them to track (and recall, if necessary) devices that are implanted in specific patients, nearly half of all respondents (47 percent) admit it would be “very difficult” or “somewhat difficult” to track patients with implantable devices if there was a recall on a particular device.
“As an industry, we must commit to transforming healthcare by reducing costs and delivering more cost-effective, high-quality patient care,” added Johnson. “That’s why GHX set out to achieve our ‘5-in-5’ goal, which aims to take $5 billion out of the cost of healthcare during the five year program, ending December 31, 2014. Stripping out these unnecessary supply chain costs is the key to keeping time, money and resources focused on the patient.”
The online survey was conducted December 4-13, 2013 by KRC Research. KRC Research surveyed 75 senior executives within hospitals larger than 125 licensed beds who have decision-making authority or influence related to the purchase and management of implantable medical devices in the operating room.
Global Healthcare Exchange, LLC (GHX) is driving costs out of healthcare by transforming the healthcare supply chain. Working with providers and suppliers, GHX is accelerating change by providing a faster, more efficient and collaborative supply chain that will take billions of dollars out of the cost of healthcare. For more information, visit www.ghx.com and The Healthcare Hub.
Getting ready for cloud data-driven healthcare
As healthcare continues to recognise the value of data and digital transformation, many organisations are relying on the cloud to make their future-forward and data-centric thinking a reality. In fact, the global healthcare cloud computing market was valued at approximately $18 billion and is expected to generate around $61 billion USD by 2025.
At the forefront of these changes is the rapid adoption of cloud-based, or software-as-a-service (SaaS), applications. These apps can be used to handle patient interactions, track prescriptions, care, billing and more, and the insights derived from this important data can vastly improve operations, procurement and courses of treatment. However, before healthcare organisations can begin to dream about a true data-driven future, they have to deal with a data-driven dilemma: compliance.
Meeting regulation requirements
It’s no secret that healthcare is a highly regulated industry when it comes to data and privacy – and rightfully so. Patient records contain extremely sensitive data that, if changed or erased, could cost someone their life. This is why healthcare systems rely on legacy technologies, like Cerner and Epic EHRs, to manage patient information – the industry knows the vendors put an emphasis on making them as secure as possible.
Yet when SaaS applications are introduced and data starts being moved into them, compliance gets complicated. For example, every time a new application is introduced into an organisation, that organisation must have the vendor complete a BAA (Business Associate Agreement). This agreement essentially puts the responsibility for the safety of patients’ information — maintaining appropriate safeguards and complying with regulations — on the vendor.
However, even with these agreements in place, healthcare systems still are at risk of failing to meet compliance requirements. To comply with HIPAA, U.S. Food and Drug Administration 21 CFR Part 11 and other regulations that stipulate the need to exercise best practices to keep electronic patient data safe, healthcare organisations must maintain comprehensive audit trails – something that gets increasingly difficult when data sits in an application that resides in the vendor’s infrastructure.
Additionally, data often does not stay in the applications – instead healthcare users download, save and copy it into other business intelligence tools, creating data sprawl across the organisation and exposing patient privacy to greater risk.
With so many of these tools that are meant to spur growth and more effective care creating compliance challenges, it begs the question: how can healthcare organisations take advantage of the data they have without risking non-compliance?
Yes, healthcare organisations can adhere to regulations while also getting valuable insights from the wealth of data they have available. However, to help do this, organisations must own their data. This means data must be backed up and stored in an environment that they have control over, rather than in the SaaS vendors’ applications.
Backing up historical SaaS application data directly from an app into an organisation’s own secure cloud infrastructure, such as AWS or Microsoft Azure, makes it easier, and less costly, to maintain a digital chain of custody – or a trail of the different touchpoints of data. This not only increases the visibility and auditability of that data, but organisations can then set appropriate controls around who can access the data.
Likewise, having data from these apps located in one central, easily accessible location can decrease the number of copies floating around an organisation, reducing the surface area of exposure while also making it easier for organisations to securely pull data into business intelligence tools.
When healthcare providers have unfettered access to all their historical data, the possibilities for growth and insights are endless. For example, having ownership and ready access to authorised data can help organisations further implement and support outcome-based care. Insights enabled by this data will help inform diagnoses, prescriptions, treatment plans and more, which benefits not only the patient, but the healthcare ecosystem as a whole.
To keep optimising and improving care, healthcare systems must take advantage of new tools like SaaS applications. By backing up and owning their historical SaaS application data, they can do so while minimising the risk to patient privacy or compliance requirements. Having this ownership and access can propel healthcare organisations to be more data-driven – creating better outcomes for everyone.