Hospitals and health systems have experienced severe supply shortages due to the coronavirus pandemic, affecting their safety and ability to provide non-emergent procedures and patient care. As a result, it’s more important than ever for your supply chain staff to keep up with utilization changes and adhere to strict data standards necessary to monitor these critical supplies. As we slowly emerge from the pandemic and reflect on areas of success and failure, data will play an even more significant role in future supply chain, clinical, and cost management strategies…and improving the worldwide supply chain.
Supply chain issues did not just suddenly emerge when COVID-19 hit. So before we look at how the healthcare industry supply chain can recover and flourish going forward, we must first examine the “perfect storm” that led your facilities to the challenges of the past year and a half.
Data Maintenance Dilemmas are Nothing New
Pre-pandemic staff members handling healthcare facility supply chain master data were usually under-funded, did a lot of multi-tasking, and often needed better industry knowledge and skills. They just weren’t able to keep up with the critical system data updates that feed an entire facility’s cost cycle process.
In fact, there’s been no shortage of supply chain management challenges since electronic ordering and master data evolved from the green screens of the ‘80s. What are some of the top ones?
- Too many product codes created by suppliers
- Deceptive marketing practices by some suppliers
- Continuous shifts in clinical utilization
- Lack of a centralized repository for the healthcare industry
- Wide variation of hand-keyed vendors, products, and descriptions
- Absence of category and classification standards
- No integrated contract price management
- Invisibility of trunk stock
- Errors resulting from invoice-only items
So as supply chain professionals worked to overcome these challenges, one enormous, unforeseen one dwarfed all the others and spread around the world at an alarming rate.
COVID Put Supply Chain Data Maintenance on the Back Burner
When healthcare facilities began to realize the supply chain disruptions caused by the pandemic, they diverted their teams from their regular master data updates. These employees now spend their days (and nights) working product shortages with suppliers, managing inventory, or pulling reports for the hospital or system’s management team. The result? More significant gaps in the master data appear as item adds, price updates, categorization, and accounting and procedure system maintenance get pushed further back in the queue. Plus, the unusually high amount of product substitutions and utilization shifts driven by the worldwide supply chain crisis are compounding the problem.
This lack of proper data maintenance is leading to serious issues for the industry:
- Supply shortages are affecting patient care due to reduced transparency around product consumption and inventory that prevents the timely detection of shortages.
- Facilities are unable to secure equivalent products to mitigate shortages because they have little detailed classification and management of medical products that could fill shortages.
- Products weren’t being managed to their contract language so hospitals had to compete for product allocations where they were not prioritized by “failure to supply” contract language.
Healthcare facilities need better ways to keep up with the constant changes in medical product usage and the absence of industry standards.
New Supply Chain Analytics and Data Requirements are Emerging
Just as caregivers and researchers continue to fight to control the COVID-19 pandemic, healthcare supply chain professionals must identify the complexities and failures of the supply chain and work to address them. Admired strategies such as lower inventory levels or JIT, sole source supplier contracts, and lowest cost overseas suppliers need deeper scrutiny and risk assessment.
Hospitals and health systems will have to evolve from using basic supply chain spend analytics, which were built primarily to reflect pricing opportunities, supplier reduction, and compliance within a contract category. Instead, it’s time to adopt advanced analytic capabilities that require a greater commitment to data management.
Pick and Choose Your Battles
As long as the pandemic continues (and even when it’s behind us), approach your data issues with care! It’s probably not a good time to do a wholesale Item Master Cleanse that would likely overwhelm your staff and still leave you with gaps in your analytics and risk management.
Consider the following strategic targets for data improvement now and to build towards the next evolution of analytics:
- Close gaps in procedure data that could lead to cancellation of critical surgeries.
- Capture and load the Unique Device Identifiers (UDI) from the GUDID to prepare for product and shortage updates from FDA resources.
- Review various supply chain, clinical, and accounting categorization schemas to ensure that PPE, implantable products, and other life-saving devices are categorized well to enable easy monitoring of inventory levels, utilization, and costs.
- Validate pricing by pulling local and GPO price portfolios to ensure that contracted prices are still effective and replacement items are correctly priced out by suppliers.
You Don’t Have to Go It Alone
Whether it’s a big project or just a data assessment, consider reaching out to us for a free consultation. Impensa Advisors maintains one of the largest curated datasets of medical products in the industry. Using proprietary matching tools, flexible levels of categorization, and analytics, we pinpoint and fix data related to supply chain, clinical, revenue, and accounting systems.
The supply chain chaos born out of the pandemic does NOT have to be permanent or fatal. But the sooner you address it with the right resources, the more likely you are to regain control and achieve sustainable efficiencies.
