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Are we being short-sighted?
Comparing the costs and
benefits of UDI
by Karen Conway,
Industry Relations, GHX
been talking about the benefits, as well as the costs, of the Food and Drug
Administration’s (FDA’s) Unique Device Identification (UDI) Rule for years.
Even now, as the rule is being implemented, the discussion, and debate,
continues. In my opinion, we have spent far more time focused on the costs,
which could delay our ability to realize the myriad of benefits that we can
achieve from being able to more accurately identify medical device. I am not
diminishing the significant expense in time and money that manufacturers are
already incurring to establish systems to comply with the regulation in an
ongoing and sustainable manner. Nor do I think it will be easy for
healthcare providers to make the systems and process changes needed to use
the unique identifiers. But I believe UDI adoption by healthcare delivery
organizations is critical to achieving the "Triple Aim," the framework
developed by the Institute for Healthcare Improvement that calls for
improving the patient experience of care (including quality and
improving the health of populations; and
reducing the per capita cost of health care.
I think the word "simultaneously" is key.
It’s not about waiting for manufacturers to fully comply with the regulation
before healthcare providers start thinking about how they will adopt the
identifiers. These things take time, and in healthcare we don’t have a lot
of time to change a system that impacts both personal and financial health.
We need to work concurrently to make it happen.
As the Association for Healthcare Resource &
Materials Management (AHRMM) Cost-Quality-Outcomes (CQO) Movement has
identified through case studies and leading practices, sometimes spending
more on products can lead to lower overall costs by reducing infection rates
and/or readmissions and in turn improving reimbursements. But not always.
The question is: How would you know if you cannot accurately identify what
product, purchased at what price, was used on which patient, and what were
the resulting total costs, quality and financial (reimbursement) outcomes?
That’s where UDI can play a fundamental role, but
only if it is incorporated across systems and processes, including supply
chain, billing, reimbursement, adverse event reporting and comparative
effectiveness research, among others.
In a new video released by The Pew Charitable
Trusts, Mercy says it has discovered benefits far beyond what were
originally expected — for supply chain, clinicians, payors and patients. The
Missouri-, Arkansas-, Oklahoma-, and Kansas-based system launched a pilot in
2012 to study the use of UDI for cardiac stents. The effort included
incorporating the Global Trade Item Number (GTIN), one of the standard
identifiers deemed UDI compliant by the FDA, in its supply chain (ERP)
system, inventory management system, billing system, and electronic record
system (which feeds the national product registries like the American
College of Cardiology’s CathPCI registry. While not always easy — some
technology systems do not seamlessly share data, and it required some
process changes for nursing and other staff — the results were compelling.
When Mercy first started the project, inventory in
one of the Cath Lab locations was documented on the General Ledger through
annual physical count at $800,000. When they began capturing the UDI in the
point of use system, they found the inventory levels to be much higher, in
excess of $2 million. By applying inventory management practices, Mercy has
reduced those levels and achieved both hard dollar savings and operational
efficiencies, something Curtis Dudley, vice president of performance
solutions, says would not have been possible without the use of UDI.
Nursing workforce satisfaction
Using a scanning system to capture UDI-like data
on products used in patient care has increased nursing workforce
satisfaction, according to Lisa Hutchinson, director of cardiac Cath Lab and
Recovery Unit for Mercy: "It’s a simpler and more efficient process that
allows nurses to spend more time on patients." Even when nurses had to scan
a product a second time to get it into the inventory system (something that
will eventually be rectified through better system integration), Dudley says
the nurses save time in the end: "Now they can simply run an inventory
report, rather than counting products by hand."
Better billing, better data
Joe Drozda, MD, who leads outcomes research at
Mercy, says having the UDI on claims would yield a number of benefits.
"Right now, all insurance companies know is that a beneficiary had a total
hip or a stent implanted, but they have no idea about the device itself. If
they had a UDI on the claim, they would know exactly what that patient
received, and they could tap into databases to assess the performance of
that device. They would be able to use it not just for cost control, but for
improving patient care."
National insurance carrier Aetna agrees. In
testimony to the National Committee on Vital and Health Statistics, Stuart
Kilpinen, executive director of national contracting for Aetna, said UDI in
claim transactions would provide a number of benefits, including giving
doctors and patients more information on quality and costs, and allowing
plans to provide members with better cost and out-of-pocket estimates prior
to the service. I can only assume that would also help hospitals better
predict and respond to both consumer and government demands for more
information about the cost and quality of procedures and have better data to
make changes to improve both.
View the video.
executive lead for industry relations at
Karen Conway works with industry associations, standards bodies, government
agencies, analyst firms, academic institutions and the media to identify
opportunities for hospitals and suppliers to optimize supply chain
operations and improve business and clinical performance. Conway was
recently elected to a three-year term on the board of directors for AHRMM,
the supply chain organization for the American Hospital Association. She
also serves on the leadership council of the Arizona State University Health
Sector Supply Chain Research Consortium and as co-chair of the HIMSS Supply
Chain Special Interest Group. In addition, she is active in the Strategic
Marketplace Initiative or SMI and serves on the editorial board of
Healthcare Purchasing News.