Turning point

It is time for Supply Chain Professionals to take time to reflect on the activities of the last few months and take advantage of opportunities to expand their leadership roles in their organizations. During the past year there have been several activities that point the way to the future and highlight the expanding role for supply chain professionals. Among all of the activities, there are two that stand out:

• Unique Device Identification (UDI) of Medical Devices – The FDA rule covers the adoption of UDI and established a timeline for progress to be accomplished.
• Population Health – This is broad topic that will impact all supply chain professionals in the coming years.

Evaluating strategies for these must also consider the changing landscape in Washington, DC with the efforts of the new administration to modify the Affordable Care Act and healthcare reimbursement activities. Each of these key areas are discussed below and provide impetus for supply chain management at this turning point for taking more active roles in leadership moving forward. There are also other issues and developing trends that promise to be disruptive to supply chain management activities as currently practiced and these are discussed briefly later.

UDI’s impact on Supply Chain

The FDA UDI rule is starting to impact a broad range of activities across the healthcare supply chain and will facilitate healthcare provider organizations in achieving improved operational efficiency. Primary impacts will be on accuracy and timeliness by ensuring the right product is delivered on time to the correct location. UDI use will also enhance tracking of transactions for correct quantities used and associated pricing with increased accuracy and visibility in inventory records and purchasing history. Using UDI will reduce and eliminate human intervention in transferring the transactions to inventory and related purchase records.

In many ways, the adoption and use of UDIs is similar to Universal Product Codes (UPCs) but adds much greater detail and will provide extensive benefits to healthcare supply chain participants. The first 10-pack of wriggly Juicy Fruit gum labeled with a bar code was scanned at a grocery store in Troy, OH in 1974. The bar code was developed in conjunction with grocery industry representatives and IBM as a means of capturing and storing retail product sales information. Today, some 40 years later, UPCs and comparable scanning technologies are ubiquitous for tracking retail product sales.

The initial provision for UDI rule development was part of the Food and Drug Administration Amendments Act of 2007 (H.R. 3580). The results of this act required the Secretary of Health and Human Services to develop regulations for medical devices by establishing standards for labeling devices with unique identifiers. Ultimately, it took seven years until publication of the final rule (September 24, 2014), based on the requirements of Public Law 110-85 passed in 2007. Since 2014, the efforts to move forward with the adoption of the labeling of medical devices as a result of the UDI rule have moved forward significantly faster than the UPCs did originally.

Today, there is no doubt that the use of UDIs is becoming pervasive across the healthcare supply chain. In part this is because the intent of the FDA UDI rule is to foster product safety notices and product recalls. This will become even more important in the future as medical devices continue to become more complex and are used more frequently for our aging populations (more on that later).

There is a wealth of information here on the rule; the use of various tools and implementation guidelines available on the FDA UDI Rule is available from the FDA web sites at https://www.fda.gov/MedicalDevices/DeviceRegulationandGuidance/UniqueDeviceIdentification/. In addition, the Association for Healthcare Resource and Materials Management (AHRMM) and the FDA UDI personnel have been working together on furthering UDI adoption and use via the ARHMM Learning UDI Community (LUC). Information on the AHRMM LUC is available at http://www.ahrmm.org/resources/learning-udi-community/index.shtml.

Since the AHRMM LUC was created in June last year, over 300 industry leaders from various healthcare supply chain sectors (including manufacturers, distributors, providers, GPOs and professional organizations, etc.) have joined and are now participating in nine workgroups focused on specific issues. Working collaboratively, these groups are evaluating complex issues related to how use of UDIs impact their industry segments and activities. Workgroups include diverse areas for future enhancement using UDIs and range from “Search Criteria for High Risk Implants,” “Device Categorization,” “Catalog Number Fields,” “UDI Benefits to Healthcare Supply Chain Processes”, and best practices for “UDI Capture” and “Unit of Use.” These workgroups are now developing case studies on best practices can serve as tremendous source of information for Supply chain professionals seeking opportunities to make operational improvements for their organizations.

As the LUC’s efforts have evolved, it has become clearer that one of the keys to future success and enabling use of UDIs is dependent on the active leadership by individuals in each of organization whether a manufacturer, distributor or provider. In addition, the need to understand IT system interoperability issues are critical in the provider organizations because of the disparate systems that need to hold and transfer UDI information. AHRMM is most interested in fostering volunteer participation in the LUC work group activities and at the very least all supply chain professionals should be attuned to and regularly review the AHRMM LUC efforts and sign up for the LUC newsletter.

There are other initiatives similar to the AHRMM LUC for UDI adoption. These efforts are closely linked to the initiatives of the LUC reviewing emerging standards of use focused on enhancing clinical effectiveness and accuracy throughout the supply chain.

As an example, the MDEpiNet initiative is a private public partnership with FDA. As part of the activities of this group, their RAPID program is focused on peripheral vascular devices with a GUDID Integration Workgroup. This group – comprised of representatives from the American College of Cardiology, the FDA, Cook, Boston Scientific, etc. – is focused on fostering manufacturers linking UDI data for end-users in the GUDID. This includes DI (data identifiers, e.g., catalog numbers) and PI (product information, e.g., clinically relevant size) in the GUDID.

Another example is the FDA’s National Evaluation System for Health Technology initiative. Last September, the Medical Device Innovation Consortium (MDIC) was awarded $3 million under a contract to establish the “Coordinating Center for the Medical Device National Evaluation System for health Technology (NEST).” As envisioned, MDIC NEST’s efforts will be focused on improving capture of real-world evidence providing quality insights that healthcare providers can use to enhance treatment decisions. These efforts will facilitate safety and foster innovation for future device development.

Last but certainly not least is the recent news from the European Symposium on Regulations of Medical Devices in 2016 the proposed use of UDIs for the European Database of Medical Devices (EUDAMED). The legislation now calls for labeling of medical devices with rules similar to the FDA’s starting by the middle of 2017. While there are some differences in the data architecture for tracking device information (DI) in the EUDAOMED system, the results will certainly foster faster adoption of the UDI standards in our growing global economy.

Population health

Population health is another area that supply chain management professionals should be knowledgeable about. There are several elements that are occurring in the environment that make this a key area of consideration. Population health as an area of focus was defined in 2003 by David Kendig and Greg Stoddart. In their definition they said the population has a new term had not been precisely defined but was a concept for the future Study of health care requirements and programs. They wrote several articles on population health with one of the earliest providing the preceding definition (“What is population health? Kindig D, Stoddart G., Am J Public Health. 2003 Mar; 93 (3):380-3).

Population health should consider “the health outcomes of a group of individuals, including the distribution of such odd comes within the group.” Their argument was that population health included health outcomes, patterns of health determinants and approaches and interventions that would link these items. In the article published by them “What is population health?”, they provided a discussion of what public health was and noted how it was different from health promotion and other approaches to our environment. As such population health requires an expansion of the organizations focus beyond individual care to understanding the needs for aggregate management of services for the populations served.

In considering elements that brought supply chain management professionals to this turning point, it is notable that the focus of Accountable Care Organizations (ACOs) is on improving quality of care while improving/reducing costs. Consideration of population health issues should be part of your strategies as an obvious area requiring future attention of supply chain management whether your organization is part of an ACO or not. As such, with regards to population health strategies, the focus of the supply chain management professionals should encompass/incorporate cost and care consideration as part of CQO efforts. Strategies to consider include the need to focus on supporting organization needs in a manner that will link elements of clinical care and supply chain systems to achieve goals of reducing costs and enhance quality of care and outcomes achieved.

An interesting note related to the AHRMM’s CQO program and population health was the recent announcement by Premier to acquire Innovatix, LLC and Essensa Ventures, LLC, both partially owned by Greater New York Hospital Association (GYNHA) Holdings, LLC. Both of these entities provide GPO services and outreach support to a number of long-term care, assisted living and senior care facilities.

Organizations outside the traditional boundaries of acute care supply chain management professionals, along with the physician practices supporting them, represent part of the future direction for population health. Trends in providing support for medical home care, infusion centers, pharmaceutical distribution, nutrition support, etc., all provide a significant opportunity for outreach from the acute care / critical in-patient care base to an expanding domain requiring logistics support for procurement assistance, distribution of supplies and management of costs, recalls, and quality of care.

Other issues and activities for future consideration

Of course while the preceding highlights three areas of consideration for supply chain professionals, but there are several other issues and trends that the leadership team needs to have some knowledge of as they plan future strategies. Healthcare and industry trends to be aware of are numerous and briefly include the following:

• Internet accessibility for all areas including linking EHRs, patient portals, kiosks, wearables (fitbits, smart watches, etc.) for patient monitoring, and UDIs via bar codes and RFID tagging with accompanying integration & interoperability.
• Robotics – Use of robots that are now providing enhanced surgical procedure tools, will rapidly expand in the future to facilitate internal tracking, replenishment, distribution, replenishment activities.
• Digital giants impacts – These will have pervasive impacts on customer experience and satisfaction as users shift to Amazon, Yahoo, and other Internet providers to have instant access to data and information on service providers and alternative approaches to reducing costs of care with needs for enhanced customer relationship management.
• Electronic Healthcare Records (EHR) systems – as organizations move towards implementation and updates of their EHRs, they need to work with both clinical staff and IT personnel to ensure that the ERM/supply chain management systems provide quality master data management and item master information (including the minimum of 18 key attributes from the Global UDI Database [GUDID] that are the minimum required for the Clinical Care Data Set for patients and transfer between care providers.
• Use of 3C’s for data sharing and interoperability, including Common Standards, Culture (Organization) Change and Business Cases, to support integration and interoperability of logistics, clinical care and financial systems.

To summarize, now is the time for Supply Chain Professionals to move forward with strategies to incorporate UDI and considerations of population health in daily operations.