by Rick Dana Barlow

Most, if not all, materials managers recognize the need for clean data – and that dirty data is bad. It’s logical to conclude that without clean data you’re just going through the motions of compiling and analyzing information that’s less than useful. That’s why relying on data cleansing software or similar services from third-party organizations is so important to a facility’s bottom line and top line.

"Unfortunately, most hospitals and health systems remain ill equipped to tackle supply cost reform given limited visibility into spend and contract performance," noted Harry Kirschner, a director at the Washington, DC-based Advisory Board Company. "Inaccurate, incomplete, and often times uncategorized data is prohibiting organizations from optimizing supplier negotiations, managing contract compliance, and proactively identifying price overpayments. Most hospitals lack the ability to conduct basic analytics such as actual spend by category and on-contract versus off-contract spend, forcing them to rely on third party constituents (consultants, GPOs and distributors) to provide them with basic insights into their spend performance. Often utilized as a temporary solution, data cleansing and data categorization vendors offer a one-time fix, but fail to prevent the inevitable backsliding required to keep materials management systems up to date."  

One of the biggest misunderstandings about data cleansing is the notion that it’s a one-time event that doesn’t require additional fixes and ongoing maintenance – either internally or by a third-party organization, such as a data cleansing firm, consulting firm or group purchasing organization.

"Transforming unclean, disparate sources of data into actionable intelligence should not be something organizations revisit every one to three years," Kirschner indicated. "Hospitals and health systems must take ownership of the critical data needed to manage their spend performance proactively and independent-ly. Top performers have invested in process improvements and business intelligence technologies that have enabled them to self-sufficiently perform advanced spend analytics by collecting contract data and linking it to actual purchases and by taking control of item master maintenance."

Making data cleansing software and services a routine item in a tightening budget can be a costly investment but even more financially painful down the road if it’s not accomplished and staff members aren’t trained to do it right the first time.

As a result, Healthcare Purchasing News Senior Editor Rick Dana Barlow asked key executives from a number of firms involved in data cleansing services and education the following question: How do you convince healthcare facilities of the need to invest in data cleansing software and services continually and to modify employee behavior to prevent dirty data from infecting their system again?

Unlike a bottle of wine, your database does not improve with age. In fact, your in-house database is deteriorating by no less than 20 percent each year. That includes changes-of-address (your share of the 40 million individuals and businesses who move each year), duplicate records, deceased individuals, area code splits, invalid emails, plus an accumulation of contact information that simply is inaccurate.

Because databases are dynamic, they must be cleaned continuously. In fact, in order to qualify for certain USPS postage discounts, your database of street addresses must be scrubbed at least twice per year. Many high-volume mailers such as banks, insurance companies and publishers will scrub their databases before each mailing because they know that mailing to an undeliverable address is a waste of postage, printing and labor.

For a materials manager or purchasing agent, having a clean database means being able to collaborate more accurately with vendors and partners. Maintaining clean source data also allows you to develop useful business intelligence and identify new opportunities.

Melissa Data recommends the following three-step course of action for any organization that relies on accurate customer or partner data.

Prevent the entry of bad data. Up to 40 percent of bad mail can be traced to data entry problems such as wrong ZIP Codes and misspelled cities and streets. Data validation software can be used interactively at the point of capture to guarantee that the records you collect and store in a data warehouse are accurate and useable.

Lawrence Pier, Vice President, Marketing, iDashborads, Troy MI, www.idashboards.com

I believe that most if not all materials managers understand the need for clean data and the importance of maintaining the integrity of the data. I think the challenges lie within the financial resources available, the desire to go through the very rigorous process and culture change, and the availability of an unbiased report representing qualitative and quantitative documentation that proves the financial benefits of clean data. If this document were available they could sell up the latter and get approval. The most logical fix to this ongoing costing situation is UPCs; however, waiting for this change is just too costly to our industry. HPN