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People, Places, Processes & Products that Influence the Supply Chain

 

INSIDE THE CURRENT ISSUE

April 2010

Standard Procedure

 

Harnessing the falling domino effect

Supply data standards can streamline expense-revenue links

by Rick Dana Barlow

As information technology issues continue to weigh down supply chain to-do lists supply data standards adoption and implementation seem to be the lubricant needed to make the variety of components and projects operate more smoothly.

Take the idea of linking a facility’s or integrated delivery network’s item master in supply chain management with the chargemaster in revenue cycle management’s domain. Even so, take the idea of maintaining either or both on the same or shared databases in an "enterprise-wide" concept.

Whatever the case, many experts agree that supply data standards should generate anticipated administrative, financial and operational benefits.

"Having a common standard language in the items master, fueled by the application of data standards makes linking the systems and communicating much easier," said Deborah Petretich Templeton R.Ph., vice president, supply chain services, Geisinger Health System, Danville, PA. "Currently, not even product descriptions are common. This makes communication very difficult. The use of standards will enhance the ability to maintain accurate information and therefore should lead to potential benefits in the charge capture and revenue enhancement areas."

John Mateka, FAHRMM, executive director, supply chain operations, Greenville (SC) Health System, concurred. "Changes should accelerate progress and improvement," he said. "Utilizing the UNSPSC codes will allow us to classify items based on a single global classification system that can assist us with company-wide visibility of spend analysis, cost-effective procurement optimization and full exploitation of electronic commerce capabilities."

Accuracy and speed should drive momentum, according to Mary Beth Lang, senior vice president of business intelligence, Amerinet, and president, Diagnostix, St. Louis. "Adoption of established supply-chain standards should speed the process by enabling the sharing of standardized product and location information and ensuring that all partners are using identical, up-to-date, reliable data," she said.

For an obvious example, Ken Cyr, a former supply chain manager now serving as a product manager for software company Craneware Inc., pointed to the drug industry.

"We don’t have to guess what that will be like," Cyr noted. "We can see it today in pharmacy, with the universal adoption of the National Drug Code to define pharmaceuticals. The NDC standard has revolutionized that segment and has brought order to a system in which anyone could name anything whatever and however they wanted. Now that we have the NDC standard, we can tie data like CPT, HCPCS and revenue codes to their standard NDC definitions. We can standardize on utilization, standardize on data better. We can more easily link drug-spend information to the chargemaster.

"For the same to happen in supplies, we need standardization such as will be afforded by GS1," Cyr continued. "It’s the first domino that has to fall, if we’re going to achieve true supply chain integration. Without it, we are stuck in the mud and we will be forever."

Jean Sargent, CMRP, FAHRMM, director, supply chain, USC Health Sciences, Los Angeles, connected the dots this way: "Using a synchronized supply chain strategy will assist in determining what is chargeable as well as creating the link from the item to the medical record then to billing therefore reimbursement," she noted.

Concluded John Gaida, vice president, supply chain, Texas Health Resources, Arlington, TX: "Standards should just make changes happen faster and more consistently."