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The key to business process automation of the non-acute supply chain is ensuring inter-connectivity across all care settings throughout the healthcare enterprise. Without the ability to communicate and track processes from site to site, and across various settings, a health system cannot achieve the automation required to operate most proficiently and effectively. Many non-acute facilities are manually operated with clinicians placing the orders, accepting the orders and putting away the orders. Successfully automated business processes improve supply chain operations, enabling clinicians to provide better care at a lower cost and have more time for patients.
“Bringing disparate systems, procurement platforms, and workflows together can be a challenge,” stated Greg Dean, Vice President of Technology Partners and Business Solutions for McKesson. Non-acute sites may be a very small part of the overall spend, but the challenge in managing non-acute facilities can lead to headaches.
There are five drivers that can make supply chain management challenging: the costs to roll out a network ERP to all sites; lack of control to drive standardization and compliancy; lack of visibility across alternative sites as part of the total network purchase program; the effort and time to implement change management across the fragmented non-acute portion of the health system; and finally working with clinicians to reduce and simplify the way they procure supplies. Without an integrated systematic business process, supply chain activities become highly inefficient and decrease productivity. There is a lack of spend aggregation, leading to the inability to take advantage of contract tier maximization.
“As with any large, complex organization, synergy and optimization are achieved when the business units and team can all operate in a similar way. Pulling different supply chain operations together from various sites and settings (ambulatory surgery centers, skilled nursing facilities, physician offices, urgent care, post-acute, laboratory, etc.) can be complicated,” especially without a strategic partner to help coordinate efforts, said Dean.
“As with any large, complex organization, synergy and optimization are achieved when the business units and team can all operate in a similar way. Pulling different supply chain operations together from various sites and settings (ambulatory surgery centers, skilled nursing facilities, physician offices, urgent care, post-acute, laboratory, etc.) can be complicated.”
— Greg Dean, Vice President of Technology Partners and Business Solutions for McKesson
Dean recommends corporate offices start with basic visibility, communication, and education throughout an organization to begin the automation process. He suggests that leaders and administrators help the end-users and clinicians understand the positive impact of automation, what the organization will gain, and why it’s beneficial to automate supply chain processes in the respective non-acute settings.
For example, surgery centers that perform cataract surgeries must be able to effectively manage its intraocular lens (IOL) consignment. Having the appropriate IOLs in stock for scheduled surgeries is critical, so is implementing technology that tracks IOLS from delivery through surgery should there be a recall on the implant.
Streamlining and automating the supply chain process provides greater opportunity for profit within the health system as well as supports a more productive clinical infrastructure. Implants are expensive. Utilizing technology designed to manage implants and products leads to more efficient processes and helps reduce costly errors.
Technology for process automation can help drive a health system’s financial goals – by maximizing the usage of EDI and online ordering portals. This ensures formulary compliance, which helps improve business performance. “Connectivity across the non-acute supply chain is critical, including connectivity to EMR, EHR, and ERP systems,” shared Liz Hayes, Health Systems Technology Manager at McKesson. “Any point that we can assist in automating a process and remove manual labor from that equation assists the health system in achieving their goals, including formulary compliance, increased efficiencies, and software integration,” Hayes added. Supply chain automation helps reduce cost and support quality of care.
“Connectivity across the non-acute supply chain is critical, including connectivity to EMR, EHR, and ERP systems.”
— Liz Hayes, Health Systems Technology Manager at McKesson
Administrative staff within physician offices spend a lot of time matching invoices to packing slips. It can be a manual, time-consuming process. Implementing three-way matching between packing slips, purchase orders and invoices eliminates the need for paper processing. Implementing a tool like Okay to Pay provides administrators with the ability to accept and approve invoices directly from their web-based procurement system.
Automation of business processes also helps the system to meet value-based care metrics. “When you can reduce the number of items going into a location, standardizing on the formulary, doing a SKU rationalization, and having a value analysis team or clinicians’ team work with our team to establish the appropriate products to be consistent across the organization, this aids cost management, particularly within the value-based-care metrics, and patient satisfaction, across the spectrum,” Hayes concluded.
Post-acute care facilities should utilize tight inventory controls to effectively manage its business. Utilizing bar code scanning and software that is designed for the post-acute work flow will help ensure that there is inventory and formulary control for clinicians, products are charged back to the patients and helps with reporting for reimbursement.
While acute care is a very mature (established, centralized) supply chain, non-acute care’s supply chain is often fragmented and fluid, so clinicians are still handling many supply chain activities. The McKesson Business Solutions team deploys several resources to assist non-acute clients, including procurement to payment solutions, connectivity tools like EDI and punchout, inventory control management, revenue cycle management, bar code scanning, and one-touch ordering, to put more time back into each clinician’s day.
Greg Dean also noted that mergers and acquisitions create additional automation and standardization hurdles. “How do you roll in twenty new sites, each of which is dealing with a whole different skill set, unique culture, and varying patient populations? These are issues often faced by our non-acute clients.”
This is where cutting-edge technology can help capture and analyze data across the health system. “Process automation and inventory control analytics takes ‘big data’ and makes it actionable,” Dean added. In the hospital setting, all supplies are more trackable and physically contained within one building, however the non-acute settings are often dispersed or scattered, which makes communication and connectivity paramount to successful automation. With assistance from McKesson’s Business Solutions team, health systems can leverage the data to compare actual product usage against ordering patterns, thus reducing waste and obsolescence.
The next chapter will provide actionable steps on determining the right strategy for streamlining product sourcing, simplifying contracting, and maximizing contracts to see operational and financial benefits across your non-acute facilities.
Negotiating a great contract is just the beginning when it comes to driving down the cost of products. There are several areas to consider when tackling strategic cost management, including accessing the data necessary to make informed decisions.