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Every day, the overall healthcare supply chain wastes 24-30 percent of supply administration time correcting data errors, according to a Sterling Commerce white paper, titled "Data Synchronization: What is Bad Data Costing Your Company?" The study estimated that each erroneous transaction costs $60-$80 to correct. About 60 percent of all invoices generated have errors; each invoice error costs $40 to $400 to reconcile. Altogether, erroneous and conflicting data increase supply costs by 3 to 5 percent. The aggregate healthcare supply chain effect is billions of dollars lost each year because of supply chain information disconnects.

For the Defense Supply Center Philadelphia’s (DSCP’s) customers, lack of data congruence may result in receiving the wrong healthcare item, the wrong quantity or an inferior item at a higher price. Additionally, on the chance a product supplier and a Department of Defense (DoD) healthcare facility refer to the same item with different nomenclatures or different item numbers, unnecessary ordering might occur. These problems, at least in part, each have their origin in inaccurate or otherwise difficult-to-manage data.

The healthcare industry, one of the largest industries in the U.S., has yet to fully address the consequences of unsynchronized data as a whole. Extending standard data throughout the healthcare supply chain is an unmet objective where accomplishment would reduce the negative outcomes arising in its absence. The need for such capability couldn’t be more evident. Media stories range from negative reports of healthcare costs and errors to positive White House initiatives that are seeking and investing in electronic solutions to problems that cost Americans billions of dollars and thousands of lives.

The DoD Medical Data Synchronization Program Manager, DSCP’s Kathleen Garvin, together with other federal and industry partners, have worked for more than three years to synchronize DoD’s medical/surgical data with participating medical industry manufacturers and distributors. This collaborative effort required creation of a set of "universal data standards" that formed the basis for electronic information sharing, transactions and movement of synchronized data from manufacturers to end-users. Also known as ‘data sync,’ it is a tool that brings consistency of quality product information using manufacturers as the ‘source of truth’ to all components in the supply chain – from cataloging through purchasing and billing.

Data sync employs standard transaction-related elements, including product identifier, manufacturers’ name and packaging levels. It is followed by the accurate and timely distribution of these data throughout the systems used by all supply chain components. Data sync also entails sharing a consolidated product data utility, a system that synchronizes, certifies and distributes consistent and accurate quality product identifiers and data throughout the supply chain.

Garvin outlined DoD’s main objectives in this data synchronization effort as to improve responsiveness in contingency and wartime operations, to improve supply chain efficiencies in peacetime operations and to reduce the cost of healthcare delivery.

DoD’s primary goal in all its data sync efforts is to improve support to war fighters in contingency operations. The ultimate goal is to transition to an industry-sponsored healthcare product data utility (PDU). Transitioning DoD’s pilot PDU to an industry PDU will ensure quality medical/surgical product data exists throughout the entire healthcare supply chain.

DoD has already expended several million dollars to develop a product data utility proof of principle for the healthcare industry. Twenty-two manufacturers as well as two major medical/surgical distributors are participating.

Recently, DoD and its trading partners have expanded the pilot to test the Global Data Synchronization Network (GDSN) concept through 1SYNC. This is the same provider that Wal-Mart, as well as the grocery, electrical and other retail industries, hard goods, etc., use. Participation in pilot phase 2 has grown to include a distributor, a group purchasing organization (GPO), a hospital and a software company. 

Data standards organizations are also involved in promoting DoD’s goal to synchronize data and transition to an industry PDU. The Coalition for Healthcare Standards (CHeS) is the most significant player in promoting the DoD’s data synchronization efforts and the DoD pilot PDU to the healthcare industry. CHeS was one of the first organizations to join DoD, almost four years ago, to study the feasibility of creating a healthcare PDU. It also sponsored and formed the PDU Organizing Committee, composed of DoD and healthcare industry supply chain leaders, to transition DoD’s pilot PDU effort into an industry PDU.

Additionally, a recently formed Healthcare Supply Chain Standards Coalition (HSCSC) under the chairmanship of the National Alliance for Health Information Technology will assist in promoting the need for data standards and a PDU. The HSCSC includes participation from the largest healthcare GPOs and several medical manufacturers.

Highlighting the need for this collaborative synchronization effort as well as the significant benefit to physicians and management in federal healthcare facilities, Garvin noted "hospital patients are at lower risk when product data is consistent throughout the healthcare delivery system." For healthcare managers, physicians and logisticians alike, patient safety is an essential element and goal of the U.S. healthcare system and of great concern at the federal level.

More than three years ago, DSCP Medical joined with the Military Services, the Defense Medical Logistics Standard Support, the Defense Logistics Information Service and the Department of Veterans Affairs (VA) to form a Joint Federal Working Group. The group’s objective was to investigate methods of standardizing the data used internally and in direct interaction between these trading partners.

Since then, DoD has built a synchronized data bank with consistent data from 22 medical manufacturers and their two key prime vendor distributors, creating more than 150,000 medical/surgical item master records. These records represent 93 percent of DoD’s most demanded medical/surgical items, including the top selling medical/surgical item, single-handed, disposable upper and lower extremity emergency tourniquets, which have saved numerous lives in current military operations. Additionally, DoD and the VA have jointly funded a three-year $8.5-million effort to synchronize DoD’s product data bank with the VA’s National Inventory File and Federal Supply Schedules to produce a synchronized, joint DoD and VA product data bank.

Industry technology leaders as well as other sectors of the federal government recognize the need for data synchronization and a PDU. In a July 2006 research report, Gartner Inc., a Stamford, CT-based provider of research and analysis on the global information technology industry, identified a technology cycle for the emerging technologies for health care providers. It identified data sync and the healthcare PDU as new technologies to watch. The report also acknowledged a growing advocacy for the healthcare PDU.

The Eastern Research Group, a firm providing consulting services in improving communication, information technology and varied safety issues, published a report for the U.S. Food and Drug Administration (FDA) in March 2006 on implementing a unique device identification system for nearly all medical devices and products. The report recognized the importance of synchronized data in a product data utility for healthcare as two of the five steps to effectively implement UDI.

Garvin, speaking at the FDA’s October 2006 conference on a panel that discussed issues associated with the development, implementation and use of a unique identification system and the use of various automatic identification technologies, added to the benefits derived from DSCP’s efforts involving medical/surgical supplies: Products involved in manufacturer recalls are easier to locate with an item identifier.

Additionally, "There needs to be a central repository for the standardization of product data and the certification of that data against industry standards so that everyone is speaking the same language," Garvin said. "We want to distribute this throughout all the systems in the supply chain."

Summing up, Garvin provided a veritable laundry list of the ultimate benefits of data sync to federal healthcare management and physicians as well as to logisticians, saying, "It brings accurate and consistent item information as well as easier and faster sourcing of products. It enables matching of files to assure lowest contracted price for purchases, allows quicker, automatic new item entry and promotes standardized identification of product information. All this is evidenced by the $8-million price reduction with over $2-million to date moved to e-commerce. It also significantly reduces unauthorized purchasing and unnecessary inventories.

"The results have the potential to improve the bottom line operating margin, but they also free direct-care personnel to care for patients rather than wading through disparate product information. It allows leveraged purchasing to achieve lower prices based on visibility of purchase volume, contributes to greater patient safety, improves product standardization and use, and promotes greater operating efficiency as well as reducing invoice and other errors."

DSCP’s assistant medical counsel, Dmitry Pilipis, assists in providing legal guidance on awarding contracts to facilitate DSCP’s ongoing data synchronization efforts. This advice includes the most recent award of a contract that will expand DoD’s program to include a pilot using 1SYNC, a data pool with the Global Data Synchronization Network (GDSN). He noted that "The pilot contemplates the demonstration of a ‘proof of principle’, in which a working model is developed to consistently and systemically provide accurate, synchronized product data throughout the supply chain. Pilipis concluded that the data consolidation and standardization efforts would provide a framework to allow benefits and savings at all levels in the supply chain.

John Charalibidis, DSCP medical product manager for data sync, said the process is currently in use by major retailers, from Lowes and The Home Depot to Wal-Mart. He went on to say that "the first step in data synchronization is for the initiating organization — in our case — the medical supply chain — to get our own ordering, receipt and distribution information organized. Then we bring a commercial service in to assemble, audit and make our data available to the rest of the supply chain participants. We’re then all working from the same ‘sheet of music.’"

Despite the evident logic of the data sync effort, it must compete with many other ways the DoD medical community can spend its resources to supply its war fighter customers.

The two most senior executives in the DSCP medical supply chain were asked how they viewed data sync in terms of overall benefits vs. its costs.

U.S. Army Col. Marsha Langlois, MS, recently-appointed director of medical customer operations, and Steve McManus, director of medical supply operations, supported Gartner’s assessment: "DSCP’s three-year data sync efforts have formed an effective collaboration between the federal sector and the medical industry to build a template for an industry-wide solution. The medical supply chain and our Data Sync Group is committed to the long-term effort involved to bring the benefits of improved efficiency as well as more accurate healthcare delivery to our war fighter customers," Langlois stated.