Healthcare Matters

Most of us were taught about the lowest or least common denominator. The following remarks by Steve Jobs were made in the context of a discussion about achieving “the highest common denominator.”

Steve Jobs –on building a tight team of very talented people: “…I found that there were these incredibly great people at doing certain things, and you couldn’t replace one of these people with 50 average people. They could just do stuff that no number of average people could do…small and medium-sized teams of these people could accomplish extraordinary things and run circles around large teams of normal people.”

GHX’s 2012 Supply Chain Summit came to a close yesterday. As previously reported, the “buzz” this year surrounded the company’s recent acquisition of a track and trace technology (Beep ‘N Track) geared to automate the implantables supply chain.  While watching the presentations and panel discussions, I found my “spend analysis-competitive-bid-centered-self” having one of those “aha” moments. To be clear, my epiphany wasn’t necessarily a result of learning something strikingly new, it was more about connecting some dots that I hadn’t previously.

GHX talks about collaboration, automation, accuracy and acceleration. From leaning out processes to accelerating transaction cycle times, it’s about having access to an accurate information flow. Supporting a dynamic baseline that can be shared by all the players throughout a supply chain –even if it’s category specific—creates an opportunity to achieve what Jobs was talking about: With my marketing hat pulled over my eyes, my epiphany centered on this idea that GHX enables network-wide value creation at a higher common denominator. That means, all the SCM application vendors working on behalf of providers and suppliers alike –all those whose technologies seek to leverage collaboration, not just create competition, should be able to produce results at even higher and more reliable levels.

It seems to me that the “tricky bit” in sourcing has always been about getting from  “identified” to “realized savings.”  In addition to delivering a new enabling infrastructure tailored to support better management of the implantables supply chain, GHX is setting the table for the industry to collaborate on a higher plane –and close the gap between a discovered opportunity and a realized benefit.

Here’s the related GHX press announcement:

ORLANDO, Fla., May 9, 2012 — /PRNewswire/ — Healthcare spend on implantable devices is estimated at $40 billion a year and affords the industry a large-scale opportunity for cost savings to invest back into patient care, reported a panel of industry leaders at the 2012 GHX Healthcare Supply Chain Summit in Orlando this week.

The panel moderated by Dr. Jeffrey Gruen, partner at PRTM Management Consulting, PricewaterhouseCoopers, included both healthcare providers (Nancy LeMaster, vice president Supply Chain Operations, BJC HealthCare; Dale Locklair, vice president of Procurement and Construction, McLeod Health) and suppliers (Brett Knickerbocker, worldwide director, Operations-Supply Chain Systems, DePuy Division of Johnson & Johnson; Larry Strauss, vice president of Supply Chain Engineering & Transportation, Boston Scientific Corp.) in order to discuss issues and approaches to tackling the inefficiency and waste inherent in the current state of the implantable device supply chain.

“We need to take the cost and waste out of healthcare and we need to do it whether the government says to do it or not,” said Dale Locklair. All panel participants conceded that changes in healthcare will proceed whether the U.S. Healthcare Reform Act remains intact after the Supreme Court review. But in the case of the implantable device market, it requires massive change management for the existing processes to be recalibrated. “It requires both providers and suppliers to accomplish these changes,” added Larry Strauss.

The management of implantable devices is a significantly manual process at most hospitals today. “The hidden costs really add up exponentially when you think of the impact on the process and the fact that the implantables are often related to the most invasive procedures that we do,” said Nancy LeMaster.

“From a patient perspective, the idea that we are tracking implantables manually is just unthinkable,” she added. “In this highly technical medical field, when we are doing these very invasive and amazing procedures that are saving lives, it must become a priority that we fully automate these systems. It’s critical from every angle that as an industry we adopt new approaches. Certainly there are efficiency and cost reduction improvements, but most importantly, it’s about the patient care benefits.”

Standard approaches, consistent with how other industries have embraced data standards, are needed for healthcare, said the panelists. “Process standards remove the finger pointing between people,” said Dale Locklair. “It’s becomes a process failure, not a people failure, and it allows us to focus on the work that is worthwhile – quality patient care – versus finger pointing. Our work is about removing burdensome and wasteful work from the system. When you look at the manual processes we have, they give us nothing but problems. We need to take what is wasteful out of the system and put it back in the system to do something meaningful and beneficial. The focus can return to patient outcomes versus broken processes.”

Nancy LeMaster added, “We have an obligation to be here 100 years from now to continue to provide care to the community. At the cost that we’re providing it today, it’s unsustainable. Every dollar wasted is a dollar of care we can’t provide. It’s an environment where we have to work together.”

“You can have the data, you can have the systems, but you’ve got to have the trust,” said Larry Strauss. “If you trust the data, and the systems themselves, then you can drive off of that and that’s what’s going to allow us to take costs out and ultimately improve patient care. It’s about having a system we can all trust in.”

GHX announced in February 2012 that the company is developing the industry’s first comprehensive supply chain solution for physician preference items (PPI) and implantable medical devices. The GHX implantable device supply chain solution will be an industry solution that allows providers and manufacturers to jointly automate shared business processes for greater efficiencies. The GHX solution will capture data from product purchase to product usage at the point of care, creating capture capability while enabling accurate billing, purchasing and inventory tracking.

—Tom Finn