Posted by Peter Brereton | September 14, 2021
Hospitals and integrated delivery networks (IDNs) have been working hard to achieve digital transformation in healthcare. This began with the implementation of electronic health records (EHR) to support patient care and it was closely followed by the implementation of enterprise resource planning (ERP) systems to support financial administration. Upon having both EHR and ERP systems up and running, some might consider their digital transformation in healthcare journey complete… but that’s a preventable error.
The third major component of the digital transformation in healthcare is a supply chain management (SCM) system. As the second largest area of expense for hospitals and health systems, the supply chain is an area that has huge potential to benefit from technology.
Most healthcare organizations have transitioned from manual processes and disjointed solutions to a single system of record for patient care and financial operations, thereby eliminating redundant technologies and workflows. Because the EHR and ERP systems are integrated with each other, this digital transformation in healthcare facilitates an automated flow of data for patient billing/reimbursement and enables real-time analytics for data-driven decision-making.
On the other hand, supply chain operations in many organizations continue to limp along relying on a patchwork of disconnected “band-aid” solutions in the absence of a core platform. The ERP system only provides visibility into general medical/surgical supplies that were ordered and not what is in inventory or consumed to a case.
Perhaps more important to note, the ERP misses costly and critical items that are crucial to manage (e.g., implants, pharmaceuticals, etc.). It cannot support the level of traceability required to perform lot tracking, recalls and expiration date management, or meet industry regulations, including the U.S. Food & Drug Administration’s unique device identification (UDI) rule and U.S. Health Resources and Services Administration (HRSA) 340B statute.
This is a huge gap that needs to be filled in order to truly achieve digital transformation in healthcare.
To make up for the limitations of the ERP system, healthcare organizations deploy standalone IT solutions in clinical areas (e.g., perioperative, cath lab, nursing units, pharmacy) and in their warehouses, none of which can communicate with the ERP or with one another.
When asked the question, “Do you have visibility into and control over ALL of the supplies in your organization?” The answer from supply chain leaders is “No.” While they can use individual solutions to gain insight into the products stored in a certain area, they miss the big picture by not bringing a SCM system into their digital transformation in healthcare journey.
When looking for an EHR or ERP system, no organization is going to separately shop for all the pieces they need and attempt to put them together themselves. So why do so many still take this approach for SCM?
Supply chains in other industries have been digital for decades — it is time for healthcare to operate as a modern enterprise with a core supply chain solution on par with clinical and financial platforms. With a single, secure, automated and integrated SCM platform, healthcare organizations can finally elevate the third critical area of their operations — the management of supplies used in patient care.
There is tremendous power and potential with the ability to track each and every supply from the time it was received into the organization through to when it was used on a patient, wasted or discarded. With real-time data on supply inventory and usage, supply chain leaders can perform demand planning, know what supplies are arriving and when, track supply receipt and delivery to clinical areas, and determine when that item was used on a patient and billed.
With all supplies managed within a single system, complete with detailed and descriptive data on each item (e.g., manufacturer, lot number, serial number, UDI-DI, UDI-PI, etc.), healthcare organizations have what they need to perform tracking and tracing down to the “each” level. This is essential information for managing expiry dates, recalled items and adverse event reporting, and the backbone for compliance with government and industry regulations.
A digital SCM system facilitates a true healthcare supply chain where all of the dots are connected versus the islands of information and data that organizations have struggled with for too long. By integrating a SCM system with your EHR and ERP systems, a hospital or IDN can reach the gateway to enterprise-wide visibility and complete its digital transformation in healthcare journey.
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