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Copyright © 2012 |
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INSIDE THE CURRENT ISSUE |
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Supply data standards stitch silver lining With IT popularity simmering, supply chain pros spot opportunities by Rick Dana Barlow A s 2010 slowed to a halt for the history books, healthcare supply chain managers not only counted down the minutes and seconds to ring in a new year. Some also may have been pondering at least the short term fate of their upcoming supply chain transactions.When the clock struck midnight on January 1, the sunrise deadline for voluntary adoption and implementation of GS1’s Global Location Number (GLN) standard officially passed. With that perceived "expiration," the campaign for the next sunrise date, December 31, 2012, for adopting and implementing GS1’s Global Trade Item Number (GTIN), officially began even as the GLN campaign technically didn’t cease. In fact, GS1 Healthcare US will be promoting the GLN and GTIN as the dynamic duo of supply data standards with the former identifying the delivery points and the latter representing the products being delivered. Based on a GS1 Healthcare US tally in mid-February, 53 provider organizations comprising 523 hospitals were in various stages of GLN implementation. In the company’s mid-February tally of suppliers, 38 manufacturers, distributors and software suppliers were actively using GLNs in some fashion. In addition, the five largest parent group purchasing organizations have been on board since last summer. Yet the active supporters among the provider and supplier segments still represent a microcosm of the marketplace. Clearly, the GLN sunrise date campaign didn’t conjure up Y2K-like computer failure fears, nor was it intended to do so, and neither is the twin GTIN sunrise date campaign. But industry participation to date should inspire some key questions among supply data standards evangelists to evaluate where providers and suppliers are at this point and whether they are where they want to be and should be. Healthcare Purchasing News tapped a variety of supply data standards evangelists to assess and grade provider and supplier acceptance of the GLN to date and anticipated GTIN acceptance. So far: Above average at best Looking back at the last two years, key proponents of supply data standards express measured praise in their performance evaluation of provider and supplier adoption and implementation of the GLN.
"We made a lot of progress, have a ways to go, but are never turning back," summarized Joe Dudas, director, accounting and supply chain management informatics, Division of Supply Chain Management, Mayo Clinic, Rochester, MN. Dudas awarded providers a B- overall. "I think providers in general did a nice job pulling together, educating stakeholders, paving new ground and implementing," he said. "The main issue I see is over-delegation of responsibility for conversion and failure to upgrade systems." But he was less generous with suppliers to whom he gave a C-. "We are forever grateful for the suppliers that took risks and engaged to support the initiative," he noted. "However, too many resisted, made it difficult and sat on the sidelines. Several large suppliers have failed to consolidate operations and systems for newly acquired divisions making the implementations more complex and risky."
"I would grade the level of provider adoption with a B with the actual number of provider organizations who have declared their GLN readiness being relatively low as compared to the entire healthcare industry," Byer indicated. "If we look beyond the raw numbers, another way to gauge progress is to look at the total dollar volume of GLN-based transactions for organizations that are ‘live.’ Today, with all of the organizations who are ‘live,’ we are easily at $500 million of transactions today using the GLN, and we will be at $1 billion by the end of the year. These are not insignificant numbers." Byer cited progress among Novation’s membership as examples of progress where 17 systems have declared their GLN Readiness, another 30 systems have taken over the editor and approver roles for the GLN Registry and have not declared their readiness, and 239 systems who have taken over the editor role. Overall, 139 organizations within Novation are active with the GLN registry. "I really feel that the raw numbers by themselves don’t tell the full story of the progress that we have made," he added. But Byer was a bit more critical of suppliers, granting them a C because the raw numbers for suppliers who have declared their GLN Readiness remains even lower than the numbers for the providers, he argued. "I feel that many suppliers have chosen not to move forward until the [Food and Drug Administration’s Unique Device Identification (UDI)] rule is published and they are essentially required to move forward," Byer continued. "A closer examination of the supplier community also indicates that behind the scenes there is a higher level of activity than the raw numbers indicate. Any supplier who is international – perhaps doing business in Australia, Turkey or several other European countries – is already required to use GS1 standards for product identification. The GTINs that are being used in Australia will also be used here in the U.S., and are not being used in the U.S. simply because there is no requirement. Many members are asking suppliers for GTINs, and suppliers are providing GTINs on Excel spreadsheets, so that would indicate that suppliers have GTINs available, but have not yet published to the GDSN."
"I would give both sides an incomplete," Hee said. "While some organizations have made extraordinary efforts to assign and implement the GLN, there is still a long way to go. Some important players have reported strong achievements. It will be important to show the overall value in the use of GLNs with an increasing number of new players. Until we can increase the penetration of GLNs to a critical mass of the industry, it will be difficult to evaluate the overall impact of this new standard."
"It’s difficult to grade the different user bases due to the slow adoption rate for the use of GLNs in e-commerce," Wylie noted. "Technological debt prompted hospital systems to evaluate their current [materials management information system/enterprise resource planning] solutions and determine whether they have the capabilities to properly handle GLNs in alignment with their long-term strategy for global data standards adoption. The need to make system updates or upgrades prevented many hospitals from moving forward last year." However, for suppliers Wylie retracted the reserved free pass she gave to providers. "Supplier adoption of GLNs is a different matter altogether since many supplier and distributor organizations often have the IT staff and budget to develop in-house technology solutions to support global data standards enablement," she added.
"Based upon the size of this initiative and the educational effort required, as an industry I think we are probably running about average," Esses said. "However, I think the numbers are trending in the right direction for providers and suppliers." As evidence, Esses cited a recent survey conducted by the Center for Innovation in Healthcare Logistics (CIHL) that revealed considerable growth intent. According to the survey, more than 68 percent of respondents indicated that they are moving towards the adoption of a data standards system in the next five years, an increase from 35 percent in the 2008 survey. About 60 percent of the 678 healthcare supply chain professionals who completed the survey worked for providers. "A key indicator in the progress of GLN adoption in healthcare is the approximately 200 manufacturers using a GLN to publish health system usable GTINs into the GDSN," Esses continued. "While that is a microcosm of total manufacturers in healthcare, those 200 can represent a significant portion of a hospital’s spend. In my experience, spend is really the key metric for successful use of the standards because the major value is the error free transactional communication between supplier and provider."
"I would give an A+ to the pairs of trading partners – IDNs and suppliers – who have already succeeded in transacting using GLNs in [electronic data interchange] transactions," Black said. "These leaders paved the way for the industry and documented their best practices. These pioneers developed new processes and modified their MMIS/ERP systems. They also learned how to implement the GLN, which required considerable work on GLN assignment and reconciliation." But Black also noted that he would issue several incomplete grades for those that have yet to make the grade. "I can think of several healthcare providers who cannot yet transact with GLNs due to MMIS limitations," he continued. "I don’t believe that these IDNs are making up ‘the dog ate my homework excuses.’ These healthcare providers have already done much of the heavy lifting related to GLN adoption. They are now waiting for their MMIS solution provider to enable the GLN or are in the process of implementing a new MMIS in order to complete their GLN initiative. I presume that these IDNs will succeed once their system upgrades are in place."
"We’d put the grade at a B+ for both providers and suppliers," Miles indicated. "To transition from multiple location systems to one consistent system requires change in entrenched business practices, IT system upgrades and increased collaboration with supply chain partners. Over the last 18 months to two years, the industry has been able to embark on driving these changes to tremendous success – and without a regulatory requirement and in the face of competing priorities." Further, Miles lauded the marketing and education efforts as key drivers for awareness and adoption. "We believe that the industry-established GLN Sunrise helped propel the industry forward, and without this stake in the sand we would not be this far along," Miles noted. "Setting the sunrise dates helped get the industry’s attention and get everyone working toward the same goal. We think that having the sunrise dates has been a big success. Currently, there are over 550 healthcare providers and suppliers that have self-reported their GLN implementation activity to date and the number continues to grow. The major GPOs announced their GLN readiness last October and have been integral in supporting this progress." Miles acknowledged that even the industry’s perceived slow progress and reception outpaces the results of previous efforts. "The healthcare industry has moved further and faster than previous initiatives to adopt common data standards in other industries, once the common standard was selected," he added. "What took 10 years in the retail industry to achieve with standards adoption is taking only a few years in healthcare. The healthcare industry set clear goals and utilized lessons learned from other industries which helped them accomplish the results to date. There is still a lot of work ahead of us as the ultimate goal is to have all partners using GLNs. The industry should be proud of what was achieved in 2010." Outlook: Steady as she goes Supply data standards advocates offer mixed reviews about whether they believe providers and suppliers are where they should or even need to be in terms of GLN adoption and implementation. "We won’t be satisfied until we have truly met the patient and industry needs," said Mayo’s Dudas. "That said, we have seen enough evidence that we are confident that the industry will complete what it set out to do with GS1 and then some."
"Our primary observation is that among our customer base and supplier base, adoption is still in early stages," Fuller noted. "While we believe that use of GLN by both suppliers and providers is critical to driving organizational value – from accurate deliveries to proper tracking of spend across the entire system – SciQuest’s direct experience is not as a promoter or tester of standards. Rather, our procurement technology platform is able to accommodate GLN and GTIN data now and in fact should be viewed as a means to accelerate adoption. "A hallmark of this industry is that it consistently rallies around early successes," Fuller continued. "As adopters continue to demonstrate that GLN standards help minimize order disruption, improve accuracy of order delivery and improve organizations’ ability to track spend across all locations, we believe that providers and suppliers will continue to adopt. In other words, the more provider and supplier organizations that adopt standards, the more they will pave the way for others to follow." For Byer, slow GS1 standards adoption merely ran into initiative gridlock as providers and suppliers have had to navigate through heavy efficiency program traffic. "The electronic health record, the definition of meaningful use, the HITECH incentives, the lack of support for GS1 standards with MMIS software, and the lack of the published FDA UDI rule has all caused the adoption of GS1 standards to be slow," he noted. DataPros for Healthcare’s Esses reiterated a flurry of specific reasons, highlighted in the CIHL survey, for implementation difficulties. "[Survey] respondents’ answers tell a story of obstacles that include other higher priority initiatives (37 percent), IT system limitations (25 percent), lack of funding (25 percent), lack of organizational understanding of the level of effort required (25 percent), and lack of IT resources (24 percent)," he said. "All of these will be overcome in a relatively short period of time as the industry recognizes that the GLN is a stepping stone to the GDSN where the true return on investment can be realized." Covidien’s Hee urged the industry to take a deep breath. "Since the date was a sunrise, we knew that there would not be immediate adoption of the standard by all stakeholders," he said. "It will take time for all of the members of the healthcare supply chain to adapt the GLN to our industry. Change of this magnitude will require a great deal of persistence and patience." GHX’s Wylie admitted that "incremental adoption provided a myriad of lessons learned that those organizations just beginning GLN adoption can use to make more educated business decisions around their long-term implementation strategy. Black from BD extolled those providers and suppliers already transacting business as "absolutely on track," he said. "This group is already succeeding and has a vision on how to scale up their efforts. The suppliers in this group are also working through significant ERP modifications to enable back office processes using GLNs. "There is another group of early adopters who have worked through the enumeration/validation process, but are stalled by a technical limitation within their systems," Black continued. "This second wave of adopters is also on track. Finally, a lot of good work is taking place in the GS1 US GLN Workgroup. This group is working towards use of the GLNs in the 867 chargeback process and other transactions, which may not always be visible to healthcare providers." Miles emphasized that all trading partners must use "consistent, global supply chain data standards for unique product and location identification. "Everyone across the supply chain needs to speak the same language when it comes to electronic descriptions for the most fundamental information in healthcare," he continued. As GS1’s point man for healthcare adoption and implementation, Miles indicated that the industry is "definitely on track with where we should be" after only two years into the initiative. "The 2010 GLN Sunrise date marked the beginning of the movement to GLN and we see a continued increase in adoption and implementation," he said. "From here, we will continue to see providers and suppliers making the GLN part of their everyday supply chain transactions, and we should see more of the healthcare community sharing their experiences for others to learn from. We expect that GLN implementation will continue in parallel with GTIN efforts." 
Editor’s Note: In the next edition, sources discuss and project GLN usage expansion in tandem with joint GTIN adoption and implementation efforts. 
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