1. Allow stimulus package grants that will encourage hospitals to design, develop, install or enhance materials management information systems (MMIS). These systems must support GS1 standards, Unique Device Identification (UDI) recording and tracking to provide for traceability of implantable and other critical healthcare products. This should also include interface capability to bring this information into the electronic medical record (EMR), another Obama–led initiative that is supported by the stimulus package.

2. Encourage the FDA to fully define and communicate their UDI guidelines to assist the industry in focusing on one distinct standards system. This will ultimately reduce healthcare costs for all, by simplifying and expediting the investments that all stakeholders will need to make into the standardization initiatives.

3. In order to create a system that stimulates the flow of standardized information, provide funding to the FDA to support the development of UDI tracking databases. These would be publicly accessible to all in order to expand and support the tracing and tracking functions that will be required.

1. Educate the healthcare marketplace on the long-term benefits of utilizing G1 standards. These include:

• Precise identification of items throughout the supply chain

• Assurance that hospitals are paying the right price for the right item

• Assurance that the vendor understands exactly what item (and unit of measure) the hospital is purchasing, reducing returns and misused items

• Precise costing of inventory on hand due to a pre-understanding of price paid

• Precise case costing due to understanding and marking exact cost per item used in patient care

• Precise identification of any asset either owned, consigned, bulk-purchased or carried in by a sales representative, since all of these scenarios may occur and each may carry a different price per each

• Provide greater precision to the identification of recalled or failed items

• Ability to clearly identify which provider is making what purchases to better understand and drive contract compliance

• Key step towards financial and operational transparency in the supply chain

2. Stimulate utilization and adoption through initial financial support of hospital computer/IT system conversions. Among hospitals’ core roadblocks to realizing the full potential of unique device identification (UDI) systems are the limitations forced upon them by their computer systems. Most materials management information systems (MMIS’) and enterprise resource planning systems (ERPs) designed for use in the healthcare vertical do not have the ability to track items at the serial number level; they stop at the item number or manufacturer catalog level. To take complete advantage of the benefits of UDIs, a costly modification or replacement of IT systems would be required, as well as facility-wide installation of bar-code readers and the establishment of bar-code reader training. Donated governmental financial assistance would encourage the IT system replacement and bar-code reader purchases required for this transition and would promote and accelerate adoption.

3. Establish conversion timeline to properly plan and roll out national GS1 standard implementation leaving no hospital behind. Building a conversion timeline will organize and rationalize GS1 standard implementation, making the process more palpable and palatable for hospitals and health systems. The conversion timeline should be realistic and attainable and take into account other large or national initiatives that may monopolize financial or human resources such as the Medicare RAC program. Input from hospital and health system executives should be considered when developing key benchmarks and targeted completion dates.

1.a. Check your on-hand inventory. If the value is greater than $1,500 per licensed bed, you are way overstocked. Consider migrating to vendor picked and packed inventory delivered directly to your par level locations. The Global Location Number (GLN) is a great way to globally identify each and every possible location within your facility. Implementation can substantially reduce your warehouse and OR storeroom inventory levels.

1.b. Begin educating the C-Suite and Board of Directors on the benefits of the coming Unique Device Identifier (UDI), which is simply the Universal Product Number (UPN) with the lot/batch number, expiration date and serial number where required, all bar-coded in standards-based bar codes. The benefits, from a financial standpoint, outweigh the costs substantially. For instance, capturing the product information at the point of care, then feeding that information to the electronic medical record, the billing system and to the supply replenishment -the hospital can learn exactly what it costs for each procedure, prevent the use of recalled or expired products, track patients that have had recalled products used on them before the product recall was initiated, and you generate a replenishment order to your storeroom, distributor or manufacturer. The UDI is mandated by federal law and the implementing regulations are forthcoming. Get the CFO and other C-Suite folks involved and develop a potential risk abatement cost model. The results could be very surprising.

1.c. Work with the suppliers in your highest cost areas such as implantables (Cardiac Cath Lab/Orthopedics) on an improved consignment program whereby you scan the product at the point of care, generate a purchase order for replenishment and a payment order, all in the same day. By the time they get the replenishment order they also have payment on the product you used. With the speed in which these devices evolve, they can be costly to own. The GS1 standards-based EDI transactions accommodate this.

1.d. Learn about the UDI and outline the potential benefits. Now start educating the entire health system you work for, from the Materials Management team to the Nurses, Laboratory Technicians, Radiology staff, Operating Room staff. Put on a show in their own storeroom and show them the products that are already labeled with the industry standard UPN, and how this will benefit them when the software is made UPN- and ultimately UDI-compliant. You will be surprised at how few items are not marked and how many have the UPN over-labeled with your own in-house label. Conduct a cost/benefit analysis on the in house labeling and charge capture process and you will see just how much can be saved in real dollars immediately.

2. Software that is UDI-compliant is the only way the industry will achieve savings and improve the quality of care. With the UDI regulations pending now, and with the history of UPN-compliant software versus HIPAA-compliant software, I see no alternative but for the FDA to regulate that all software in healthcare be UDI-compliant. 

3. It is up to each materials management professional to able to educate their C-Suite on the fine points of UDI implementation and develop cost savings models with the key players. The overall cost reductions, improved quality of care and improved reimbursements from fewer HAIs, not to mention the improved reputation in the community, are all excellent reasons to implement the standards based systems.